Can you advise your clients on SMSF issues?

After the removal of the Accountants’ Exemption, there are limitations on what you can discuss with your SMSF clients unless you are authorised under a license to give financial advice.  
Below is a guide to what conversations can be held and under what conditions.

 

Client conversation Not Licensed Licensed
Recommend a client set up an SMSF    
Recommend a client rollover the benefits from their current plan    
Recommend a client consolidate several accounts into the single fund    
Reducing pension balance to $1.6m as per reforms    
Recommend the amount of contribution a member should make    
Recommend a client make use of a specific contribution strategy with their SMSF    
Recommend that a client commence a pension (either account based or TTR)    
Recommend a client use their SMSF to purchase property    
Recommend a client use their SMSF to purchase property with an LRBA    
Recommend the use and advantages of binding death benefit nominations    
Establish an SMSF on client directions    
Point out in general terms that clients may lose benefits by moving from their current plans    
Have a factual discussion about the contribution caps a member will be subject to    
Provide factual information in relation to matters to do with operating an SMSF (sole purpose test, related party transactions, etc.)    
Provide audit services in relation to an SMSF1    
Advise the minimum (and maximum in TTR) pension payable from prepared accounts    

It’s important to understand “What is advice?”

According to ASIC, advice will have been given if:

  • A person makes a statement that may influence the client to take action; or
  • A client interprets what was said as a recommendation to do something.

Protect your practice – make sure you understand the conversations you can and can’t have if you choose not to be licensed to give SMSF advice.

1Must be a registered auditor

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