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Protect consumers from unlicensed advice: ASFA

Media Release 10 September 2013

10 September 2013

Protect consumers from unlicensed advice: ASFA

In the wake of reports that self-managed superannuation fund (SMSF) members are being offered luxury international holidays in exchange for buying property through their fund, the Association of Superannuation Funds of Australia (ASFA) has reiterated calls for mandatory AFS licensing for all persons involved in the sale of investment products to SMSFs.

Any individual or firm providing advice on the purchase of a financial product is required to hold an Australian Financial Services License which requires those giving advice to be suitably qualified and also to give advice which is appropriate for their client. ASFA considers that such requirements should extend to those who are marketing residential and other property to those with a SMSF or who, as part of their marketing, suggest that individuals establish a SMSF to purchase a property.

ASFA CEO Ms Pauline Vamos says it’s essential that consumers have adequate protection, so that they can be confident they are receiving quality advice regarding their superannuation investments.

“For some time now ASFA has been concerned about the growing number of people being targeted by schemes which offer attractive incentives up front at the expense of good retirement outcomes down the track.

“Such schemes run the risk of falling foul of the sole purpose test that applies to all SMSFs. As well, provision of large incentives indicates that a property is not being sold at a fair market price.

“With more and more people entering the SMSF sector each day, it’s critical the regulators address the growing concern the community has around its governance, and ensure professionals working in this area are licensed appropriately.”

Ms Vamos says it’s also in the best interests of the Australian community that balances in SMSFs are invested with the sole purpose of generating the best retirement outcomes.

“Prudent management of concessionally-taxed superannuation contributions is essential to ensuring we have a system that is sustainable now and into the future.

“It’s essential that the investment decisions SMSF holders make are based on good quality advice and with a long-term, strategic approach. Don’t exchange a luxury holiday today, for the lifestyle you want to have in future when you retire,” Ms Vamos concluded.

For further information, please contact:

Lisa Chikarovski, Media Manager, 0451 949 300

About ASFA

ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.

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