SMSFs that don’t check their advisory team’s credentials risk being penalised, writes James Frost
There is so much paperwork that SMSF members and trustees have to review, it’s understandable that they sometimes don’t get the chance to cross-check the credentials of their service providers.
But a series of new developments makes it timely to ensure that your professional advisory team has everything squared away, lest you put your retirement nest egg at risk.
Chief among the checks to perform is to ask whether or not your accountant had applied for an AFSL or will opt out of providing advice from July 1.
Accountants had previously been able to provide basic advice around SMSFs, such as when they should be set up and how much money they could contribute to their fund. That’s now changed.
As concerns grew about a small cohort of accountants who were tipping client funds into unsuitable investments and banking fat commissions, new regulations were ushered in to protect investors. And they include the removal of the so-called accountant’s exemption.
While this change will affect accountants more than individual investors, SMSFs should take care to ask their accountant if they do indeed have an AFSL and check the number against ASIC’s officer register at www.moneysmart.gov.au.
Another potential sleeper issue for SMSF members is using an auditor who doesn’t have a valid registration. According to a recent alert from ASIC, around 185 SMSF auditors are at risk of losing their right to audit funds.
The regulator says the auditors in question have failed to lodge outstanding annual statements and pay relevant fees. If they do not meet their obligations, they will have their registration cancelled by July 22. ASIC says they have had “ample time to come to grips with their responsibilities and that multiple reminders have been issued”.
The message here is that your go-to SMSF experts need to be put under the microscope from time to time, even if it is just to check their accreditation. After all, the one disadvantage facing most SMSFs is the lack of recourse to the Superannuation Compensation Scheme. Make sure you don’t rue the day you decided to DIY your super.