ASIC imposes additional conditions on SMSF Advisers Network

The Australian Securities and Investment Commission (ASIC) has imposed additional licence conditions on SMSF Adviser Network (SAN) due to its significant increase in adviser numbers in a relatively short period of time.

The regulator launched a surveillance under which it reviewed a number of SAN’s client files and identified that some of the company’s advisers “failed to demonstrate compliance with the best interest duty and related obligations”.

Also, ASIC found that client files often lacked evidence to support the advisers’ recommendations that clients established a self-managed super fund (SMSF).

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As a result, the regulator believed that the firm had inadequate supervision process in place to ensure that advice provided by its representatives was in the best interests of clients.

Under the additional licence conditions, SAN would be required to “engage an independent expert to review and test the compliance of advice provided by SAN’s advisers.”

“When providing SMSF advice, financial advisers are required to adequately demonstrate why an SMSF is appropriate for the client and why it is in the client’s best interest,” ASIC said in a press release.

“ASIC expects financial advisers to use their skills, expertise and judgement in determining whether an SMSF is appropriate and not rely solely on client direction.”

The licence conditions were imposed by consent as a result of SAN’s engagement in addressing the concerns identified during the ASIC surveillance.

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Surely the clue is in their name. They are practically shouting "We will recommend an SMSF to you regardless of your personal circumstances and other potentially better options, because that's how we make the most money!"

And to add insult to injury, many of these practices probably promote themselves as "independent" because they collect their conflicted revenue via invoiced fees.

Well that's interesting. SAN is owned and operated by the NTAA (National Tax & Accountants Association) and their tag line is "The SMSF Advisers Network (SAN) is an Australian Financial Services Licence (AFSL) designed by accountants for accountants to give NTAA members the simplest way to advise their SMSF & Superannuation clients". And to make it more appealing to accountants - it only costs $250 PER MONTH (exc GST) for 1 AR!!! How good is that!!! Now I'm sure there are a handful of accountants licensed by SAN who understand and adhere to the stringent requirements to which fully licensed advisers must abide, however the vast majority of accountants will CONSISTENTLY FAIL BID because they've never had to document the research required to support the recommendation for a client to setup an SMSF. The 'advice' is usually provided verbally so there's NO paper trail. If ASIC reviewed more files from SAN ARs I'm sure they'll find that the vast majority of SoAs will say that the recommendation to establish an SMSF was at the client's request/direction. #BIDFAIL

Michael Styles; MBA.
It appears that ASIC are out for accountants in the SMSF space. Alot of ASIC staff are employed on a rotational basis between the banks and the investment houses. I wonder if those staff are required to declare their conflict of interest? I have worked in accounting and taxation for years and rarely, if ever met an accountant that does not have the best interest of the client in mind when providing their services. Accountants are on average far more qualified (i.e. have a university qualification) than most financial planners. All my career i have seen dodgy, unprofessional, almost criminal at times advice from financial planners. I never see ASIC on a mission to stop these dodgy planners. They often appear to act with immunity. Perhaps ASIC staff are too close to the banking industry to actually concern themselves with the systemic pillage of the public by so called financial planners

Are you on drugs???? " I never see ASIC on a mission to stop these dodgy planners. " Your perception of reality is bizarre. Up until now ASIC has been relentlessly persecuting financial planners. If you want to understand what is really happening you only need to take note of Garry Weaven's comment back in 2013 after Labor passed the FOFA legislation. Weaven said after FOFA was implemented "Now that they have taken care of financial planners our next target is self managed super funds." It's the unions who are driving the attack on accountants recommending SMSF's. It's not the banks, they are divesting their wealth businesses. Financial planning has been destroyed and the next target is accountants. The unions want to control all of Australia's superannuation money because it gives them control of the majority of the means of production and therefore, a strangle hold on the nation from which they will force through their socialist agenda.

Comrade I 100% agree with your comments. The 'Rivers of Gold' report talk about exactly this move by Unions, Labor and ISA as a concerted attack on every other super provider including SMSF's so that the Unions get control of a multi-billion dollar industry. They literally have hundreds of millions of dollars revenue on the line here and will stop at nothing to get their hands on it any way they can.

Aside from Keating cleverly inserting unions where they had no right to be, in super, Labor's next finest achievement was making key appointments within ASIC in the form of Medcraft the incompetent fool, and Kell the vicious FP nemesis who orchestrated the corrupt culture we see today. Where else in the world would you see the ISA in charge of billions of super wealth never once being investigated by the governing regulator, despite tens of millions of annual fees/commissions and 'indirect member fees' paid out to union reps for 'consulting' not to mention blatantly political advertising from super revenue and not for the sole interest of member benefit?

Hello right wing team. I find it intolerable that the unions "Revolution On Worker Capital" as Weaven calls it has been allowed to continue under a Liberal government. Although Turnbull was no Liberal, he is a champagne sipping socialist, but the rest of the Liberals went along with him. The unions have definitely captured ASIC which is proven by the fact that ASIC has never audited industry super funds. There is no reasonable excuse for not applying the same level of scrutiny to industry super funds as they apply to non-industry super funds.

I am also astonished that the accountants in this forum are spewing out hatred at financial planners (unless they are not accountants). Financial planning has been decimated by the relentless attacks from the unions and the accounting profession is their next target.

Michael Levin; MBA
Are you people for real. When accountants were removed from this space years ago, the government effectively left Dracula in charge of the blood bank. We ever I ask a client to see a financial planner they say they refuse to see them. The general public have much greater faith in accountants and not much in financial planners. Most clients say, and I quote "I don't wish to be ripped of by a "financial planner".

You are right Michael. At the moment most people do trust accountants more than financial planners. But accountants should be respecting that trust, not exploiting it. Accountants who recommend inappropriate and unnecessary SMSFs and investment properties due to the extra ongoing accounting fees they generate, are doing the wrong thing by their clients.

Justifying it by saying "at least they'll be better off than seeing a financial planner" was never ethically defensible, and these days it is no longer accurate. Financial planning regulation and standards have increased markedly in recent years. In reality consumers are now much more likely to get good quality advice from a licensed financial planner than an accountant. If accountants continue to exploit their historical trust advantage and provide clients with substandard advice, that trust advantage will quickly be eroded. And many more accountants will (rightly) be sanctioned by ASIC.

Thats pretty sad Micheal, you should form a network with yourself and some planners, it works well when we work side by side, you should try it. Some of my accountants best clients have come from me, and vica versa. You are missing out on a lot of new clients and some great business relationships by being so insular and backwards looking.

It is sad. I agree. Every accountant I have ever met has a university degree with a lot of them obtaining postgraduate qualifications. Most financial planners I have met have a two day or two week (accelerated learning) diploma financial planning. Forget a relationship with a financial planner. Our firm and our clients are better off without them. I feel accountants should develop relationship with economists and refer their clients to them for financial advice. They are much better able to assist clients than financial planners.

I have tried to refer clients to financial planners. We have over 1500 clients. 98 percent of clients will not see a financial planner as they do not trust them. The client says that they would rather not get advice than see a financial planner. From our experience it appears that planners have a very bad reputation among the public. I disagree that accountants are setting up SMSF's just to collect fees. That is actually unethical and accountants have a legal duty to act in the best interest of their clients. Most accountants do act in the best interest of their clients. Same cannot be said concerning financial planners

James these comments you make are a load of crap! I see clients that dont trust accountants too, however I dont tar them with the same brush. I have a double major in econ and fin for a start so dont go getting too holier than thou. You arent writing to some wet behind the ears plebs here. I wouldn't work with you anyway, your attutude stinks. I feel sorry for those 1500 clients that will only get advice from you the poor things, probably all end up on the aged pension.

Hang. You have just inadvertently proven the accountants comments correct. You are not a financial planner. That's why you care about your work and are good at it. You qualifications are in economics and finance (not financial planning), similar to accountants qualifications (most accountants have an accounting and "finance" major). Therefore you are a economist with a finance major practicing in the area of advice work. Again you have proven that it takes a business or economics major, from "UNIVERSITY" to be in the advice space. Not a two week (or two day) accelerated learning diploma in financial planning, which most (90 percent upwards) of the so called financial planners possess.

James, you said "Most accountants do act in the best interest of their clients". What % is most?

There are good and bad accountants to say accountants are better than financial planners is laughable do a quick search on the ASIC Media site put in the word "Accountant" and see how many accountants have been charge for defrauding their clients. Anyone remember Brad Sherwin?, Steve Hart? Nicholas Ripper??? All upstanding Accountants..Please

Empirical evidence Steve. The public generally trust accountants and generally do not trust financial planners. Most if not all accountants have university qualifications. Most financial planners have a two day, two week financial planning diploma. Accountants legally have duties to act in the clients best interest and do act in their interests (of course their are some bad ones, although this is the exception to the rule). Most financial planners are self serving (again there are exceptions to this rule also). Proof is in the pudding, the public are very cautious when it comes to planners. I think get rid of planners and replace them with economists and accountants, the public would be much better off.

"Most planners have a two day, two week financial planning diploma" ?
So which is it, 2 days or 2 weeks?
Its not 1995 anymore, James

Its both some actually study for two weeks and really put in a fantastic effort. Depends on the private institute they are paying for the supposed diploma.

Another leftist troll. James, you need to catch up with your masters, they have now moved on to calling Accountants a duding and rorting profession. Oh and by the way there are many practicing accountants who do not have a degree but rather only have a diploma of accounting so stop telling lies.

Sorry I have been an accountant for 35 years and never met an accountant who does not at least have a degree.

Well you must not be very observant. I know several accountants that do not have a degree. They are members of the IPA.

Hey James C, I think guy is one of your mates - "David Manteit - My website"

I rest my case, dumbest thing I have seen from a so called highly educated and trusted Accountant!!

To be a "Full" member of any accountancy body you must have a degree. The laws accepts a "full" member of any of the three accountancy bodies as being an accountant. So if your not a "full" member you are not a recognized accountant. Therefore accountants must have degrees from a university. That being said An accounting diploma is to too two and a half years full time study. Whilst its not a degree it is far superior to any two day or two week cereal packet diploma of financial planning.

There are grandfathered members of the IPA with a diploma of accounting and not a degree. I know some of these accountants. Also your BS about a two day or two week diploma for a financial planner is an outright lie. That story was put forward by a Journalist several years ago. He completed his FP diploma in two weeks but he was given unit exemptions due to the fact that he already had a finance degree. I received unit exemptions on my business degree because I held a diploma in financial planning so I guess on your logic my accounting degree is invalid because I completed it in a shorter period of time due to the exemptions. I am sick of this slander against financial planners. But if you are an accountant shouldn't you be concerned that Shorten is now calling accountants dudders and rorters. The paid socialist trolls will now be filling accounting news websites with demonizing rhetoric against accountants to trash the legitimacy of the accounting profession in the eyes of the public. I suggest that you should go and fight against that rather than spending your time trashing financial planners.

All the accounting bodies have grandfathered arrangements from many, many, years ago. the CPA, IPA and CA all have older members that only had diplomas. You are going back many, many, many years. To be a full member of the IPA with FIPA status you are required (and have been required for along time) to obtain a masters in addition to your degree. You are going back a long time. There are even practicing solicitors who have diplomas of law from the old SAB course. Even a NSW supreme court judge that only has his SAB diploma. That being said, these were "grandfathered arrangements" from a long, long time ago, Those members are probably mush older and represent no more than ten percent of the profession. I spoke to CA Australia and they estimate that less than ten percent of practicing accountants have diplomas and state any accountants from the modern era must obtain at least a degree, preferably higher to be a "full" member. Only full members of the three accounting bodies are legally recognised as accountants. Therefore for many years legally recognised accountants must have at least a degree or they are not legally recoginsed as accountants.

Labour will always attack accountants, as they have financial planners and other professionals. Labor wish to redistribute income and wealth form conservative hard working people to those who vote labor. This way they can purchase votes from their constituents. That's the labor way destroy the hard working, industrious person, destroy the economy to win votes.

all three associations have grandfathered accountants. they are grandfathered because they have significant experience.

all three associations now require at least a degree to become a full member. IPA requires (depending on your qualification at entry) either a graduate certificate, graduate diploma or a masters degree to become a member.

education criteria is set for all accounting bodies in australia by IFAC, the global body for accountants. all members of IFAC (IPA, CPAA, CA ANZ) have to follow IFAC's education standards to maintain membership

A great factually correct comment Bobby. I was not running down accountants who have a diploma and not a degree. In fact one of the accountants that I know who has a diploma is an excellent accountant with a lot of experience. My previous comments where aimed at the grubs who were claiming that accountants are superior because they all have a degree and that all financial planners are dumb because they only have a two day or two week diploma. Their comments are factually incorrect and slanderous and really just abhorrent. They need to ask themselves what is their own motivation for being so malevolent towards financial planners because it is not right to engage in destructive criticism. Many financial planners are losing everything they have worked for as a result of the RC's recommendations and ASIC's aggressive actions. As a result, suicides are occurring, although I suspect that will make the malevolent grubs in this forum happy. Maybe that is their objective, to push some planners over the edge.

Yes there have been and definitely still will be unethical financial planners but the accounting profession has the same problem. In fact there is a statistically significant proportion of the community with psychopathic traits so unethical people will exist in every occupation. Financial planners have copped an unfair amount of abuse which has mostly been driven by the unions as a marketing strategy so that industry super funds can gain control of Australia's superannuation savings. Accountants should be smart enough to understand what is really going on and stop attacking financial planners. You need to watch your own back because the unions are coming after accountants now. Their current focus is to make SMSF's an unviable option and that means accountants are in the union crosshair.

Point proven. Facts to financial planners are dumb. Perhaps its their low education criteria. That's why they have a very low reputation and often invest their clients funds in investments that yields the highest commission for the adviser. I agree James C sack planners and place economists & accountants in their positions. Remove Dracula form the Blood bank.

You are dumb! Commissions have been banned since 1 July 2013. So tell me why do accountants demand a 20% to 50% cut from a financial planners fees on an ongoing basis from the clients that they refer to a financial planner. The accountant is getting money for nothing by sticking their hand indirectly into their clients wallet. The accountant is doing nothing for this money, not even bearing any risk. Thousands of accountants demand these payments for a referral so where is the accountants honesty and integrity towards their client? You are full of BS. But I suspect you are just another leftist troll being paid from union money to carry on the socialist march in the revolution in workers capital by demonizing your targets. You should get a real job that adds to our society instead of actively working to destroy the value structures in our society.

Whats it like to be a troll Micheal , do you go home and tell the wife or husband or whatever you had a great day trolling people on line? Do you go to the pub after work and tell people that you troll others most of the day? Or do you hide the fact that you get off trying to hurt other people? You must be so filled of hate, you poor thing. If this makes you happy, Micheal, you must be a really twisted person. I feel really sorry for you Micheal, I really do.

Comrade. So it appears you cannot generate you own fees. You must rely on trusted (educated) accountants for your income. Planners are pathetic. Hang your not even a planner your an economist (why do you class yourself in the same category as these uneducated salespeople). Accountants are not filled with hate. We are just sick and tired of the recalcitrant, immoral and unethical behavior we as a profession see from a lot of planners on a daily basis. it is out right disgusting.

Gee, the communist trolls are out in force today. Most accountants are not consumed by hate. In fact most people are not full of hate. However, 100% of communist trolls are full of jealousy and hate and as a result want to hurt other people. It must be difficult for you to be a failure in life and not have the courage to bear your own cross and work hard to transcend yourself into being a better person. It is much easier to blame your pitiful existence on others who you despise because they are more successful than you. But you should just keep on going with your bitter resentful attacks and see where it leads you in life because in my estimation you are on a one way ticket to hell.

Its always the left, Comrade, that resort to subjective slurs. the accountants here are presenting factual, logical information as viewed by the general public. You digress to illogical superlatives. The accountants are merely responding to the first two comments by financial planners disparaging accountants in the advice area. We are presenting facts, education differentials , moral variances and ethical differentials. Off course you digress to subjective slurs. Typical leftist incoherence. Of course its ok for planners to disparage accountants (see the first two comments above). But when accountants have something to say, how dare they.

If you are an accountant then you must have a severe case of selective memory. The accounting profession has been at the centre of the biggest corporate collapses in history. I guess Enron has slipped your mind. That was a nice display of unethical accounting and auditing practices. What about the GFC? It was caused in part by ineffective accounting standards for complex financial instruments. How about the collapse of ABC Learning? That was a lovely display of unethical accounting where the accounts of ABC Learning were altered to add millions of dollars of revenue that did not exist in an attempt to keep the company afloat. I think they call that fraud. I can go on and on with other examples as there are hundreds of them. The accounting profession has a credibility problem which is why it has suffered an increase in government legislation. So strutting around like you belong to a morally superior, ethically pure profession is delusional. But i suspect that you are not an accountant. Rather you are a paid union troll masquerading as an accountant in an attempt to give a level of credibility to your BS comments. Maybe you can answer these questions. As a result of major collapses such as Enron legislation was changed so that the board of listed companies had to have a majority of independent directors. This was implemented to protect the shareholders by deterring management and accountants from engaging in unethical conduct that destroyed shareholder value. So why is it that Industry Super Funds do not have any independent directors on there boards let alone a majority of independent directors. How do the members know that these union run funds are acting in their best interest? They won't let independent research houses into their funds to analyse the investment managers. Are we just supposed to trust them. Also what is the education requirements for a person to be a director on the board of an Industry Super Fund? I believe there is no education requirement whatsoever. Why don't you attack the obvious deficiencies in industry super funds.

Well said Comrade. From the rat with gold teeth brigade.

Comrade, No its the con jobs that call themselves planners and are trying to sell overvalued, over inflated properties in Queensland, NSW Central Coast and Melbourne ($20,000 to $40,000 in fees from the developer to the planner, of course undisclosed) Or the planners that allocate their clients funds into wraps that pay the most returns to financial planners (not their clientele) that are going to hell. They don't even require a ticket as the the powers that be have a special place reserved specifically for them.

Danielle, I agree with most of your comment. Planners who are conning their clients to buy investment properties from developers and receiving secret commissions definitely need to go to hell. However, some accountants are also involved in this unconscionable conduct. Some planners were guilty of placing their clients into wraps that paid the adviser the biggest commission but commissions have been banned since 1 July 2013 so this problem has been eliminated. Plus grandfathered commissions will be banned soon so the commission argument is really over. Here's a relevant question for you. Why do Industry Super Funds refuse to let independent research houses such as Morningstar into their funds to analyse their investment options and provide qualitative research reports? This should be a legal requirement or are their members supposed to just trust these union run funds?

Comrade, I think this person has like 5 to 6 different personas, maybe even more, they all hate planners of course, and are very spiteful. Borderline psychopath just my opinion. If this person really has 35 years experience as an accountant, well its a 50 or 60 something person sitting down writing all this stuff....I feel sorry for this person. Whoever they are. They need to retire and go sit on a beach somewhere, before they blow a valve.

I agree, very sad that a person with 30-35 years experience say 50-60 years old has to blow a valve and be so worried. They need to go get a life and move on.

You are right Hang. The person writing these horrendous anti planner comments under 5 or 6 different personas must be a psychopath. Whoever this person is they obviously get off on hurting people because they definitely have no empathy. Unfortunately this psychopath won't blow a valve because psychopaths don't care about what they do to others they only care about themselves. However, they live a parasitic life so they don't last to long in any relationship so they have to move on once they are discovered. So hopefully, the psychopath making the spiteful comments in this forum will move on soon. Thanks Hang. Hope you have a great day .

I am an the accountant who directed other accountants to view and comment on this forum. It was based on the initial disparaging comments towards accountants. If you wish to make unkind comments toward members of SAN, (by the way no Accountant in SAN has been sanctioned or lost their licence, ASIC is merely concerned that SAN has too many members). If ASIC was really concerned then it would start banning those accountants or Ban SAN. I personally think the government wants everyone in a union controlled fund or a retail fund. They cant have future access to funds managed in an SMSF. It has definitely got out of hand here, no doubt. Although members in one industry cannot make nasty comments and not expect a reply. That being said it has definitely become toxic. That was not my intention. There are well qualified as well as well experienced professionals in both areas.

You directed them to make up false names and write exactly the same way as well? You DIRECTED them?? Ill bet my bottom dollar all those comments above are from YOU, no one else, just you. Now you want to pretend there is some sort of accountant army that bands together to reply to comments on websites, and that you are their leader. This just gets better and better......wheres my popcorn.

I emailed other accountants and lawyers in my firm and in other firms. I expected constructive debate and perhaps conciliation and understanding through that , not this. Fine, no problem I was just trying to be reasonable. If you wish to believe that the thoughts of others are the thought of one person, you take comfort and solace in that. Most of my colleagues and friends do not hold your profession in high regards, I was hoping to perhaps change that. I was trying to throw in an olive branch and make the conversation more constructive and inclusive by refocusing on issues that are more paramount and concern both professions. There is definitely not an army of accountants that bands together, well at lest I would hope not, to do what you have suggested. I never expected this, I am extremely surprised.

David, Micheal, and others that you post under, this is my last comment on this. This is a FP based website, I know for a fact there are many accountancy sites that pay out planners, thats fine, but I dont get on there and start fights with them. Ill tell you one thing for free , you guys are being hunted by asic, this carve out you once had, its gone. You need to be FASEA qualified soon to offer advice end of story. This means all you guys will need to do at least 4 bridging courses and sit the exam like the rest of us. I do really wish you all the best with SAN, I think its a massive target waiting to be audited by asic, just my opinion. If they do audit it and look at every scrap of paper and every interaction you have with clients, you better make sure you have your butt covered. I once read a story about 3 brothers that fought, the old man said listen break this one twig, they did. Then he said break these 3 twigs together, they could not break that. Its the same as us, we need to work together, taxation and financial planning are hand in hand. Once we all realise this and stop the fighting the better of all of us will be especially the clients. Give the clients the best of both worlds, this is the way forward for both of our professions.

Comrade . How can the ATO just ring members of the public ,which they are planning on doing and question them for having a property in their fund and suggest diversification? How can the ATO do this without taking their personal circumstances into account, perform a fact find and provide tailored advice to that member (or fund) without an SOA? Also will the ATO be required to have an AFSL licence or be an authorised representative to do this?

You are right Hang. This person is the same person writing all the anti-planner comments under different personas. No doubt a malevolent psychopathic union troll. I obviously triggered this person with my questions about their cherished communist union runs funds in my comments above given the questions about the ATO.

So David or whoever you are, the ATO can do what they like with regards to asking trustees about their funds investment strategy. The ATO is the regulator for SMSF's. However, you should know that being a highly educated accountant, hahaha.

Hang and Comrade maybe you are both the same person? Are all the planners comments here the same person? Perhaps that's the case and are you are projecting your shadow identities on the accountants here. I did know that. It's called sarcasm. Glad to see you are switched on Comrade or is it Hang, or whoever you are ?

I worked in an accounting firm and they were flogging at least 1-5 SMSF a week post the GFC. It was literally "would you like some fries and a trust deed with that tax return Mr & Mrs Consumer". Literally ripping people out of industry super funds at the bottom of the market in 2010 and placing them in cash within a SMSF and doing it during tax return meetings in under 30 minutes. Option like staying and moving to a conservative option were disregarded, just playing on peoples fear and lack of education. Very little regulation in this space.

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