ASIC consulting on changes to SMSF advice guidance

The corporate regulator is in the process of amending information sheet 205 and 206.

Speaking at a recent conference in Sydney last week, Chartered Accountants Australia and New Zealand (CA ANZ) superannuation and financial services leader Tony Negline said ASIC is currently in the process of amending and adjusting information sheet 205 and 206.

The two information sheets were released back in 2015 and specify the types of risks and costs that ASIC believes an adviser should consider and discuss with their clients when providing advice on SMSFs.

Some of the statements within information sheet 206 have been controversial within the SMSF industry, with ASIC suggesting that on average SMSFs with balances below $500,000 have lower returns after expenses and tax compared with funds regulated by APRA.

ASIC’s guidance on minimum SMSF balances was recently challenged by research report released earlier this year by the University of Adelaide.

The research data revealed there were no material differences in performance patterns for SMSFs between $200,000 and $500,000 compared with APRA-regulated funds.

The was also research undertaken by Rice Warner and the SMSF Association in 2020 which indicated that even SMSFs with balances between $100,000 and $150,000 could still be competitive with APRA-regulated funds, depending on what service providers they used.

ASIC told SMSF Adviser in March that it was in the process of reviewing the research on SMSF performance and minimum balances and would consider the implications of the research on its guidance.

Mr Negline said there is no set date yet for the release of the amended information sheets but the advice industry should be prepared for some new pieces of guidance in the “not-too-distant future”.

“We are working other industry associations including CPA Australia, the SMSF Association, and a number of others to provide feedback to ASIC about the draft of the changes they would like to make,” said Mr Negline.

24 October 2022
smsfadviser.com