Accountants who have provided self-managed superannuation fund (SMSF) advice have been urged to make contact with their professional indemnity (PI) insurers to determine the degree to which they are covered with respect to advice provided before the new licensing regime cut in on 1 July.
Referencing recent warnings issued by the Australian Securities and Investments Commission (ASIC) about the provision of advice outside of an Australian financial services license (AFSL), industry consultant, John Wiseman, warned that accountants would need to be transparent with their clients.
He said that irrespective of ASIC's recent alert of advice outside an AFSL framework over the last three years — lawyers and PI providers were unlikely to be lenient in circumstances where clients suffered considerable financial loss.
"Many accountant clients that undertook SMSFs in the past as low cost savings, investment and retirement vehicles will find themselves with no option but to restructure their SMSF or revert to an industry, retail or corporate fund — at potentially significant cost," he said.
"If the costs and impact associated are substantial — many clients will question the previous advice or lack of communication and poor pre 1 July service and seek redress through legal action, hence the need to contact PI providers sooner than later," Wiseman said.