As the trustee of a self-managed super fund (SMSF), you are responsible for ensuring your fund is compliant with superannuation laws. While many SMSF trustees turn to their accountants for assistance, only some areas fall within their scope of practice. The fund has to be kept compliant through the assistance of an accountant with the proper qualifications and licences.
Accountants and Self-Managed Super Funds: A Background
From 30 June 2016, accountants were no longer allowed to provide services for SMSFs without holding an Australian Financial Services Licence (AFSL). Their exemption was allegedly found in the Corporations Regulations 2001, specifically Regulation 7.1.29A. It let accountants give advise on both SMSF establishment and winding up without the AFSL.
By mid-2016, financial advice reforms (FoFA) were introduced that saw the exemption removed from by the government. Instead, there were stringent rules set in place relating to financial advice from accountants.
What rules are in place for accountants about advise?
The trustees of a self-managed super fund can receive a wide range of services and advice from accountants. However, when there’s personal advice mixed in with financial advice and services, that will only be legally permitted if the accountant is licenced with an AFSL. It’s the same one financial advisers need to hold on to for the provision of personal advice on financial products and services.
An accountant that does not have an AFSL has limited movement: assistance with basic self-managed super fund administrative tasks (paperwork for rollovers, paperwork for fund establishment and more). They can also provide information on strategies and investments as long as it’s factual.
Advice and information on a self-managed super fund strategy or an investment product’s suitability will not be allowed. The accountant must have an AFSL, no exemptions.
Working with an accountant that holds an AFSL will go a long way. This is because they can have direct involvement with the following:
Establishment Of A Self-managed Super Fund
- Advise on the appropriateness of an SMSF for your personal circumstances
- Establish or wind up an SMSF
- Explain the suitability of different super investment options and funds
- Recommend one super structure over another
- Suggest consolidating or rolling over assets into a single fund
Contributions
- Recommendations regarding additional super contributions
- Suggestions when it comes to salary sacrifice arrangements
Pensions and Withdrawals
- Calculate the super pension amounts needed to meet your income requirements based on your account balance, life expectancy and estate plans
- Organise an ad hoc lump sum withdrawal
- Recommend rollovers out of an SMSF
- Recommend starting a super pension or transition-to-retirement pension (TRIP)
Estate Management
- Organise a death benefit nomination that’s binding
- Recommend appropriate beneficiaries
Investment Assets
- Prepare a tailored investment strategy for the SMSF
- Recommend establishing a Limited Recourse Borrowing Arrangement (LRBA)
- Recommend purchasing property through your SMSF
- Recommend specific assets to buy when establishing an SMSF including basic deposit products and cash management accounts
Conclusion
When a person is a trustee for a self-managed super fund (SMSF), it is natural to seek counsel. Accountants are allowed to give advice to a certain extent, but they must have an Australian Financial Services License. Non-AFSL holders are very limited in what they can do and how they can assist, so it’s best to work with a licenced accountant.
Looking to get help from a financial adviser in the Gold Coast? Reach out to New Wave Financial Planning today! We look after clients both locally and nationwide from our Gold Coast office.
