The SMSF Professionals’ Association of Australia (SPAA) has cautioned against over-reaction following the release of the Australian Securities and Investments Commission (ASIC) report into professional advice in the self-managed super fund sector.

The regulator recently reviewed over 100 pieces of SMSF advice provided to investors, concluding that the majority of it was adequate but with pockets of poor advice.

While ASIC commissioner Peter Kell was up-front about the review of investor files not being a representative sample and, indeed, intentionally aimed at finding bad practices at the lower balance end of the SMSF market, SPAA felt greater clarity was needed.

“SPAA welcomes this report as it will help to ensure higher professional standards of advice in the SMSF sector,” said SPAA chief executive Andrea Slattery.

“But SPAA believes that the limited nature of the report means not too much should be read into it. The research is based on only 100 pieces of advice to low- balance SMSFs plus those advisers that are prolific spruikers of property and borrowing and those that have had consumer complaints made against them. This is a very small subset of SMSF advice, only addressing the really risky end of advice to the SMSF industry.”

Slattery added that in the context of nearly half a million SMSFs, this research should not be regarded as defining all professional advice in the SMSF space but that it was useful to know what the regulator expects from advisers.

“The report also shows that consumers should seek SMSF specialist advice to ensure that they are getting the best quality advice best suited to their individual circumstances,” she said.

Professional bodies work together

In related news, the Institute of Public Accountants (IPA) and SPAA have reached agreement to work together in areas such as accreditation, advocacy, research and policy development, organisational efficiencies, and education.

The collaborative agreement hopes to bridge the public accountancy and SMSF sectors, reinforcing the role both organisations play in enhancing standards across all professions servicing the SMSF sector.

“We have a great deal of respect for the creation of a profession in SMSF advice as well as the work that SPAA does in support of the SMSF sector, and we believe this agreement will provide an even stronger voice and enhanced member services,” said IPA chief executive officer Andrew Conway.

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