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July 3, 2014 at 8:46 pm #4112
Are there any papers or documentation about when you can use General Advice and when you should use Personal Advice? I know of course the difference between the two, but as an advisor, are you ever required to give personal advice?
example – a client is referred to you to setup a SMSF. They have chosen to setup a SMSF because they want to invest in some product or service.
You are referred the client as the product provider does not give advice in superannuation.
You give general advice in SMSF, establish the SMSF and send the client on their merry way. You would also talk about insurance and other investments. I know the situation is brief, however if the client wants the SMSF setup, can you as the advisor give General Advice only? or are you required to complete a full fact find and determine if the SMSF is suitable for that client?July 8, 2014 at 10:12 am #4120
No doubt you’re familiar with ASIC Regulatory Guides 175 and 244, which outline the requirements for providing general and personal advice. We also suggest you read ASIC’s Report 337 ‘SMSFs: Improving the quality of advice given to investors’.
The law doesn’t specify that you must provide personal advice in relation to SMSFs, it simply identifies the elements of general and personal advice. We are aware of some dealer groups that provide SMSF related advice under a general advice model. However, these dealer groups have developed a formal process for providing advice in this manner and have strict training and supervision frameworks. Before undertaking a strategy of providing SMSF advice under a general advice model, we would suggest that you seek legal advice as it’s potentially risky, both from a regulatory perspective and in terms of potential exposure to claims.
Author: Katherine Marchant