Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC urges mandating minimum SMSF balance

ASIC/SMSFs/regulation/lrbas/

8 October 2018
| By Mike |
image
image image
expand image

The Australian Securities and Investments Commission (ASIC) has advocated both prohibiting limited recourse borrowing arrangements (LRBAs) and/or mandating a minimum balance for self-managed superannuation funds (SMSFs) as a means of better protecting consumers.

Answering a question on notice from the Parliamentary Joint Committee on Corporations and Financial Services, ASIC listed what it regarded as possible policy solutions which would help prevent consumers being advised to inappropriately establish an SMSF.

It listed member education, better financial advice, the requirements for setting up an SMSF and better compliance and oversight.

On the question of requirements for setting up an SMSF it said, “consideration could be given to prohibiting limited recourse borrowing arrangements (LRBAs) and/or mandating a minimum SMSF balance”.

“We note the Council of Financial Regulators is currently considering LRBAs and is due to report to Government by the end of this year,” the ASIC answer said.

It suggested that consideration could also be given to extending the proposed design and distribution obligations regime to the establishment of SMSFs.

“This could involve imposing an obligation on SMSF promotors to consider the type of consumer whose needs would be addressed by establishing the SMSF and the channel best suited to distributing the SMSF as a product class.”

Dealing with financial advice, ASIC suggested that the new training and education standards to be set by the Financial Adviser Standards and Ethics Authority (FASEA) should improve the quality of financial advice provided to Australian consumers.

“ASIC has suggested that it might be appropriate to require specialist training for persons providing advice to set up an SMSF,” it said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

2 weeks 5 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

3 weeks 5 days ago

So we are now underwriting criminal scams?...

6 months 3 weeks ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

3 weeks ago

WT Financial’s Keith Cullen is eager for its Hubco initiative to see advice firms under its licence trade at multiples which are catching up to those UK and US financial ...

3 weeks 4 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

6 days 15 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND