How does the ASIC licensing regime work?
Do you advise on whether an SMSF is right for me?
We do not provide any advice as to whether or not an SMSF is right for any particular client and operate solely as accountants, not as financial planners. Many accounting firms operate on this basis, and are still licensed by the Tax Practitioner Board as tax agents and the SMSF Association as SMSF Specialists, checkout bottom section of the founders page for links to the various sites to confirm.
Financial Planning/ASIC License
As we do not provide advice as to whether an SMSF is appropriate for clients we are not required to be ASIC licensed. We have made this decision for two reasons:
- We do not want to compete with financial planners who are some of our best referrers/customers and are experts at the advice side of things.
- Asking an SMSF Specialist if an SMSF is the right tool for you seems like a massive conflict of interest, far too much so for our tastes! The adage that when you have a hammer everything looks like a nail come to mind, we simply don’t believe that we would ever be truly impartial to give advice in that area.
In short, we can assist with setting up an SMSF if you have done your own research and those are your instructions but if you want advice as to whether an SMSF is right for you we can refer you to a suitably qualified Financial Planner to provide you with a full Statement of Advice which is outside of what we do.
See below the key part of the ASIC rules, also linked here:
(Copied from the ASIC website on the 26th November 2024, please refer to the ASIC website for the most updated version)
Establishing, operating, structuring or valuing an SMSF
You may provide advice on establishing, operating, structuring or valuing an SMSF without an AFS licence: regulation 7.1.29(5). This means that without being covered by a licence, you can:
- provide advice on:
- the practical steps that need to be taken to establish or wind up an SMSF
- how to add new trustees and members to an existing SMSF
- the different ways an SMSF could be structured
- how to process transfers or rollovers of funds
- assist clients to complete paperwork (e.g. to acquire securities through the SMSF, as long as you do not influence the decision to acquire those securities)
- help clients to add new members and trustees to a fund or to exit a fund
- arrange to wind up an SMSF on a client’s behalf.
You may also provide other relevant factual information that your client should know about establishing an SMSF (e.g. that they must have the financial accounts and statements for the SMSF audited each year by an approved SMSF auditor).
You can only rely on this exemption if the advice is provided to a trustee, a director of a trustee, an employer sponsor or a person who controls the management of the SMSF. The advice must be given to the person in their capacity as a person who controls the assets owned by the trustee of the SMSF, and not in their capacity as a beneficiary (member) of the SMSF.
Where you are relying on this exemption, if your client is a ‘retail’ client (as opposed to a ‘wholesale’ client – see section 761G and related regulations for the definition of this term), under regulation 7.1.29(5)(d) you must provide a written statement to your client that:
- you are not licensed to provide financial product advice under the Corporations Act
- they should consider taking advice from an AFS licensee before making a decision about a product.
Please note that on our Setup Form you will be required to indicate your approval to the following meeting the requirements of regulation 7.1.29(5)(d):
- I understand SMSF Australia Pty Ltd and its staff/representatives are not financial planners, do not advise clients what investments they should or shouldn’t buy, that they are not licensed to provide financial product advice under the Corporations Act. Further, I am aware ASIC recommends that I should consider taking advice from a licensed Financial Planner before making a decision about a financial product or service.
Do you have any questions about the license regime or our Setup services?
Give us a call on 1300 392 544 or get in touch online.