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ASIC has begun investigating several hundred SMSF funds to see if any associated set up advice was compliant, and one mid-tier fears smaller firms in particular will be in the firing line.
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Mid-tier fears for ‘easy target’ accountants in ASIC action
28 March 2017
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As announced earlier this year, ASIC is currently conducting a major shadow shopping exercise in a bid to target unlicensed SMSF advice.
In emails seen by Accountants Daily, it is clear ASIC has selected several hundred funds for random investigation that were set up in September 2016, and is contacting tax agents associated with the funds.
ASIC is asking if the clients of the tax agent received any professional advice about establishing the SMSF, and if so, that the contact details are passed on.
While ASIC is gathering details about both financial advisers and accountants as part of this project, it is understood that broadly, unlicensed accountants are on the regulatory radar in particular.
The information supplied to ASIC is treated as anonymous, but the general findings will be published in a report slated for the second-half of this year, an ASIC spokesperson said.
ASIC could not outline any further details of the investigation, except to confirm that it is pursuing its “major” shadow shop as announced in February, and in doing so will be looking at random samples of SMSF advice.
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Despite being relatively lax in the past to instances of accountants operating outside of the accountants’ exemption in particular, BDO’s national leader for superannuation, Shirley Schaefer, suggested this time ASIC will be taking no prisoners.
Although accountants are largely not trying to “be mischievous” and genuinely think they are acting in the best interest of their clients, there are many who are still acting outside the law, and could be setting themselves up for compliance action.
“I do think sometimes ASIC targets the easy targets, the smaller firms, the smaller practitioners,” Ms Schaefer said, acknowledging that it’s significantly more resource-intensive to audit a mid-size or big-four-sized firm.
“In fact, that’s probably where they are going to find most of the issues, in the smaller practices,” she said.
Ms Schaefer acknowledged that many accountants do not agree that the SMSF services they are providing fall into the financial advice category – an argument which is largely irrelevant in 2017.
“This is not just tax advice. I certainly believe [SMSFs are] a structure, not a product, but that argument is gone. There’s no point having that one again. We’ve been there, and it’s gone,” Ms Schaefer said.
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