COMPLIANCE
The ethics of SMSF advice
The newly imposed Financial Adviser Standards and Ethics Authority Code of Ethics has been the cause of much consternation in the advice industry. Bryan Ashenden highlights the standards to which SMSF advisers will need to pay close attention.
BRYAN ASHENDEN is head of financial literacy and advocacy at BT Financial Group.
It’s been over seven months now since the Financial Adviser Standards and Ethics Authority (FASEA) Code of Ethics came into effect for financial advisers to consider when providing personal advice to a retail client. And to a large extent, the transition has been smooth, which is a great reflection that in reality most advisers have always been acting ethically when providing advice. In reality, many of the issues with the code have really centred on the question of how to document the actions, thought processes and considerations that arise and not actually the way the adviser has acted. However, when it comes to advice regarding SMSFs, things can be a little more complicated.
The first complication is actually determining who it is that you are advising. We often remind our clients if they have (or are contemplating having) an SMSF, one of the important aspects to always remember is keeping the assets of the fund separate and distinct from their personal assets. The ATO has a significant focus on this as well. So what does it mean when it comes to the Code of Ethics? Difficulties are common in advising SMSF clients: Am I advising a person as an individual or as a trustee? Who do I address my advice to? Does it matter? Aren’t they the same, given all members Continued on next page
QUARTER III 2020
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