Australian Financial Services Licensing (AFSL) Forum

This topic contains 2 replies, has 3 voices, and was last updated by  Concerned Adviser 7 years, 5 months ago.

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  • #3583 Reply

    licencefx
    Member

    I was just cold called about setting up a SMSF…. I was under the impression that SMSF would fall under the anti-hawking provisions and therefore not allowed to cold call people to establish them. thoughts?

    #3584 Reply

    Megan Jaksa
    Member

    Hi,

    An SMSF is certainly a financial product that falls within the anti-hawking provisions of the Corporations Act.  These provisions do not entirely prohibit cold-calling in relation to financial products. For example, provided the call was made between 8am to 9pm Monday to Saturday to a number that is not listed on the Do Not Call Register, and if the customer is given a PDS prior to being bound to acquire the product, then the call will likely fall within the law.

    If you still have concerns about the call you received we suggest informing ASIC or ACMA (if you are on the Do Not Call Register).

    Author: David Court
    Co-contributor: Megan Jaksa

    #3601 Reply

    Concerned Adviser

    Hi Guys, I have also came across this recently (I am an adviser). I was asked by a lady to look through all the documents that were sent for her to sign to make sure it was legitimate. She was cold called, spoken to about SMSF’s, and all of a sudden was sent paperwork to set one up, including corporate trustee documents. The basis for establishing the SMSF was supposedly to access crude oil, dax, gold & silver trading. It was going to cost them $15k to set this up, $12k of that related to a 3 year membership with this trading group. She was not told about the obligations of trustees, the need to pay for annual tax returns / audits, insurance or given a comparison of features / costs between her existing funds. She in fact did not know a thing about investing and after some simple questions I determined her existing Australian Super fund was most likely the best option for her.

    I found it concerning that not only was she cold called about setting up this complex structure, but when I spoke to the guy who sent her all the paperwork I asked if he had prepared a statement of advice (as all the questions she was asking me would’ve been addressed by this crucial document.. He then went on to say that he had acted on a execution only basis (transaction without advice), and that personal advice had been offered but was declined. I found this extremely hard to believe when she was the one targeted in the first place.

    He then went on to say that because they had $170k between her and hubby in super that it was a better setup for them as it could make more money (citing that retail and industry funds make 5% returns. I disagreed obviously.

    Seems there are many cowboys out there taking advantage of all this SMSF buzz. There must be so many people falling for this $hite.

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