Regulation of SMSF advice

Guides and resources

This is a highly regulated area of practice, so it’s important to understand what advice and services you can provide without being authorised under an Australian Financial Services (AFS) licence.

The following guides and resources will help you to understand the situations in which you need to be licenced.

  • SMSFs are financial products
  • Exemptions for certain SMSF services
  • Your options for providing SMSF advice and services
  • Related resources

Self-managed superannuation funds are financial products

SMSFs are a financial product. It’s important you understand the types of SMSF advice and services that require licensing under an AFS licence, and what exemptions can be relied upon to provide unlicensed SMSF advice and services.

This document provides information on when an AFS licence is required, when an AFS licence is not required, professional and ethical standards, sample disclaimers and other reference sources. Please note: This resource is currently being updated for legislative changes, including the FASEA Code of Ethics.

This guide provides you with on overview of what superannuation and SMSF advice and services will require you to be licensed.

Importantly, the accountants’ exemption (Regulation 7.1.29A) was repealed on 1 July 2016. This means that neither an accountant, nor any individual, can recommend the set up or wind up of a SMSF without being appropriately licensed under an AFS licence. This includes advice that could reasonably be regarded as being intended to influence a person in making a decision about an interest in a SMSF.

The provision of unlicensed financial product advice is potentially a breach of the law and could incur significant penalties, including fines up to $36,000 for an individual or up to two years imprisonment. Further, it will not be covered by Professional Indemnity Insurance and could risk your professional membership.

Exemptions for certain SMSF services

While the accountants’ exemption was repealed, other exemptions continue to permit the provision of specific SMSF advice and services without being licensed under an AFS licence, such as Corporations Regulation 7.1.29.

However, before you relying on an exemption, it’s important to be aware of how the exemption operates, including any specific obligations such as the provision of a written disclaimer.

Your options for providing SMSF advice and services

There are a range of options you can consider to ensure that your clients have access to SMSF advice and services:

Become an authorised representative

As an authorised representative of another entity’s AFS licence, you can provide licensed SMSF advice and services to your clients. There are additional compliance obligations, however they differ from being responsible for running the AFS licence.

There are education and experience requirements to becoming an authorised representative.

CPA Australia has published this guide to help you in selecting the right AFS licensee. It covers the key factors you should consider and the key questions to ask.

Hold your own limited or full AFS licence

Running your own AFS licence can provide you with more flexibility and independence than being licensed under another entity’s AFS licence. However, there are additional education and experience requirements that you must meet to be eligible to apply for your own AFS licence.

There are also a range of compliance, financial and resources obligations that an AFS licensee must commit to, in addition to the requirements to provide financial planning advice.

Refer clients

A key factor to a successful referral arrangement is ensuring that you and the financial adviser share similar values and commit to making the arrangement work. This can include joint venture arrangements.

It is also important that you understand what SMSF advice and services you can provide to clients without being licensed.