The securities regulator has warned against investing in crypto through an SMSF without proper financial advice.
ASIC has called on individuals to seek proper financial advice before investing in crypto assets through self-managed superannuation funds.
In response to an increase in marketing that recommends switching from retail and industry funds to SMSFs to invest in crypto, ASIC said that individuals should not rely on social media ads or online contact promoting an “investment opportunity” or “high return” portfolio.
“Setting up an SMSF is one of the most significant decisions you can make relating to your retirement savings,” ASIC said.
“Before making the decision to set up an SMSF, seek advice from a licensed financial adviser.”
In particular, individuals should be wary of cold calling, text messaging and emails that recommend transferring super to an SMSF or investing in crypto assets via their SMSF.
“Australians who decide to self-manage their super should consider the risks before using their SMSF to invest in crypto assets,” ASIC noted.
“As the trustee of your SMSF, you ultimately bear responsibility for the fund’s decisions and for complying with the law even if you rely on other people’s advice – licensed or otherwise.”
ASIC noted that there were rules governing what investment an SMSF can make and taxation consequences for investments including cryptocurrencies.
Investments must also be permitted under the fund’s trust deed and be in accordance with the fund’s investment strategy.
“When developing and reviewing your investment strategy you need to document how your fund’s investments will meet your retirement goals having regard to diversification, the risks of inadequate diversification, liquidity and the ability of the fund to discharge its liabilities,” ASIC said.
The regulator pointed to its own website, Moneysmart and the ATO website as providing resources for information about scams, crypto investments and SMSFs.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
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