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ASIC may ‘come knocking’ despite exemption, accountants told

Unlicensed accountants offering establishment-only advice with superannuation may run afoul of ASIC if they fail to make advice referrals, as the corporate regulator continues to pour resources into shadow shopping and compliance activity. 

SMSF Jotham Lian 03 October 2017
— 1 minute read

Speaking at a Chartered Accountants Australia and New Zealand (CAANZ) conference last week in Sydney, The Fold Legal solicitor director Jaime Lumsden Kelly said ASIC would “come knocking” if the regulator became aware of an unlicensed accountant establishing SMSFs without any further discussion with the client.


While the establishment exemption is legitimate, Ms Lumsden Kelly said the onus was on accountants to hold a comprehensive conversation with their clients before executing the service to avoid potential pitfalls.

“Although you are not required to do so, you probably should alert them to the fact that they should perhaps consider getting advice,” Ms Lumsden Kelly said.

“The danger in not having that conversation is if something goes wrong, the client will tend to automatically come back and say, 'Hey, you are my trusted adviser, why didn't you tell me that I shouldn't do this?'

“Obviously the double-edged sword with not being licensed is that you can't advise a client to have an SMSF, and you also can't advise them not to have an SMSF because that's also financial product advice but because of the trusted adviser status, I do think there should be a conversation there.”

Instead, Ms Lumsden Kelly believes unlicensed accountants would be better off using the referral exemption in conjunction with the establishment exemption to ensure that clients are fully aware of the opportunity to obtain advice.

Although accountants may be reluctant to hand off clients, Ms Lumsden Kelly says a collaborative referral relationship would be a safer approach in choosing to remain unlicensed.

“I think it's dangerous to do the no advice exemption on its own, because if ASIC was to come knocking and they said to you, ‘We have serious concerns that your clients haven't been getting advice', and even though you've suggested that they should get advice, they don't know where to go to get that advice,” she added.

“I understand too that ASIC might ask questions and it doesn't mean anything might come of it.

“You might be able to satisfactorily answer those questions but there can be a lot of time and money invested in actually answering those questions to ASIC's satisfaction so I would always say it is much better to set things up in advance so that it works well and never have to deal with those questions in the first place.”


ASIC may ‘come knocking’ despite exemption, accountants told
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it.