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14-258MR AFS licensee addresses ASIC concerns on SMSF advice
Interprac Financial Planning Pty Ltd (Interprac), an Australian financial services (AFS) licence holder based in Melbourne, has agreed to address ASIC concerns relating to advice provided to some clients about self-managed superannuation funds (SMSFs).
An ASIC surveillance of Interprac identified some concerns about the appropriateness of advice provided to clients on the establishment of an SMSF. In particular, there were concerns relating to:
- the advice not being sufficiently tailored to the needs of each client, and
- inadequate comparison of clients’ existing superannuation to the recommended SMSF.
In response to ASIC’s concerns, Interprac has agreed to undertake a number of measures to improve its advice processes and to ensure clients receive appropriate financial advice. These include:
- appointing a compliance expert to review, assess and, if necessary, make recommendations regarding SMSF advice provided by Interprac to clients
- writing to all clients who may have received poor advice to inform them of their internal dispute resolution and external dispute resolution rights
- requiring advisers to undertake additional training with a particular emphasis on replacement product disclosure and the best interests duty
- requiring all advisers providing SMSF advice to clients to complete specialist SMSF training
- employing an additional compliance resource, and
- placing some advisers on a pre-vet program.
Interprac is required to report back to ASIC regarding the implementation of the agreed measures to confirm ASIC's concerns have been addressed.
ASIC Commissioner Greg Tanzer said, ‘The SMSF sector continues to grow rapidly and more Australians than ever before are either considering or operating an SMSF. ASIC will closely monitor advisers on SMSFs to ensure they have the processes in place to provide consistently good financial advice to consumers.’
Interprac has cooperated fully with ASIC’s inquiries and ASIC acknowledges the constructive action taken by Interprac to address its concerns