Your SMSF might be at risk
SMSF trustees should brace for a change in the way their accountant deals with them in regards to their Self Managed Superannuation Fund after the 1st July 2016.
From the 1st July 2016, The Australian Securities Investment Commission (ASIC) requires all accountants that give SMSF advice to be licensed. Any accountants who are not licensed from the 1st July 2016 cannot provide SMSF advice to their clients.
Accountants are able to give SMSF advice at the moment as they currently have an exemption under the Future of Financial Advice legislation. This exemption expires on 30th June 2016.
“An SMSF can be a great retirement vehicle — but without proper oversight, risks can quickly accumulate and compromise your future.”
What should you do?
The first step is to contact your accountant to see if they are licensed to give advice on your SMSF. If they are not licensed they may need to refer you to someone who is. You should also discuss with your accountant any additional fees that may incur due to the new licencing requirements. In the past your accountant was able to provide advice casually over the phone or in person and they have probably been doing this for years. From the 1st July 2016 they will no longer be able to do this.
What happens if I receive bad advice?
If you receive bad advice and suffer a material loss from the 1st July 2016 and your accountant isn’t licensed it could mean that any compensation you seek could be affected. This is because they may not have the appropriate level of professional indemnity insurance that covers financial advice. By having an accountant that is licensed to give advice on your SMSF you can be assured that they will have the right level of professional indemnity insurance.
The way accountants deliver SMSF advice is changing. It is important to know these changes and how they are going to affect you. If you have any questions or concerns please feel free to contact;
Martin van der Saag
Director
T: 02 9984 7774
E: martinv@nac.com.au
Cayle Petritsch
SMSF Specialist Advisor
T: 02 9984 7774
E: caylep@nac.com.au
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
SMSF Compliance Is Non-Negotiable
Trustees must adhere to superannuation law, trust deed requirements and ATO reporting obligations — non-compliance can lead to penalties.
Investment Strategy Should Be Well Diversified
A diversified portfolio aligned with goals and risk tolerance helps protect the SMSF from market swings and concentration risks.
Governance Needs Ongoing Attention
Regular reviews, proper documentation and clear decision-making processes reduce the likelihood of mistakes and disputes.
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Frequently Asked Questions
What does it mean when an SMSF is “at risk”?
An SMSF may be at risk if compliance, investment or governance issues exist that could lead to penalties, loss of tax concessions or financial loss.
What are common SMSF compliance risks?
Typical compliance risks include failing to meet the sole purpose test, not following the fund’s trust deed, late lodgements, incorrect contributions, or poor documentation.
How do investment choices affect SMSF risk?
Poor diversification, high concentration in one asset, property over-leverage or unsuitable risk profiles can expose the SMSF to volatility and losses.
Can poor governance put my SMSF at risk?
Yes. Lack of regular strategy reviews, inadequate record-keeping and failure to separate personal and fund dealings all heighten risk.
What should trustees do if they identify risk issues?
Trustees should promptly seek professional guidance, review their investment strategy, improve governance and fix compliance issues to mitigate risk.
How do I check if my accountant is allowed to give SMSF advice?
The best first step is to contact your accountant directly and ask whether they’re licensed to provide SMSF advice. If they’re not licensed, they may need to refer you to someone who is.
It’s also important to ask if there will be additional fees involved under the new licensing requirements.
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