Since ASIC’s 575 report into SMSF advice quality was published last year, the regulator has continued to push for advisers to encourage new SMSF trustees to access ATO training materials – and it will continue to do so at the Self-Managed Superannuation Fund Association’s National Conference in Melbourne this week, SMSF Association board member Liam Shorte says.

Shorte will host a session at the conference on Wednesday with Kate Metz, the acting senior executive leader of ASIC’s financial advice team. He says the quality of SMSF advice will be high on the agenda.

“We’re looking at what issues came out of the 575 report, and we’ll be talking about what ASIC will be looking at in the next 12 months,” Shorte says. “We’ll also look at the tips they put in there to help advisers give the advice the right way to avoid scrutiny.”

The report Shorte refers to includes a finding that: “Many SMSF members do not properly understand the advantages and disadvantages associated with setting up and running an SMSF.” ASIC and the Australian Tax Office, it stated, were considering “further encouraging individuals to undertake SMSF trustee education”.

The report then specifies the ATO’s “free approved online education courses” as appropriate material for this purpose.

Shorte says the regulator will be looking for feedback at the conference on when would-be SMSF trustees should be trained on their rights and responsibilities.

He says one of the main issues is that would-be trustees should be receiving the relevant training earlier in the process. “Because at the moment they’re getting all this information when they sign their deeds and company constitution setup documents, and at that stage it’s just another form to sign,” he says.

Shorte believes the issue of how – and when – advisers inform trustees of their rights and responsibilities will come into the spotlight.

“[ASIC] is worried that people are being pushed into SMSFs, so if the adviser can show that they’ve given them educational material and links to everything, then at least it shows that they’ve actually been given the opportunity to learn,” he says.

It’s not so much a safe harbour provision, Shorte says, as a component of quality advice. He explains that the ATO courses include “about 27” short, easily digestible videos, which were originally designed to educate people who had breached trustee rules but are now being promoted as a benchmark educational tool.

“I’m already recommending them,” Shorte says. “Clients love those 2- or 3-minute videos that help explain things like concessional contributions and pension payments. They watch the video and then they print off the transcript; it covers all main areas of being a trustee, in bite-size chunks.”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
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