Can you offer ‘free’ SMSF setup? ASIC attacks SMSF promotor

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Adjunct Professor, Dr Brett Davies
Founder, Legal Consolidated

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Can you offer ‘free’ SMSF setup? ASIC speaks.
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ASIC attacks SMSF promotor, but is it fair? Good old ASIC has successfully applied a penalty on a business seeking to set up your SMSF for ‘free’ – but then charging you $1,100 per year. The ASIC $10,800 slap on the arm is because the advertising of ‘free’ potentially misleads you as to the true cost of setting up a self-managed superannuation fund (SMSF). ASIC attacks SMSF promotor

ASIC attacks SMSF promotor

ASIC’s did not like the concept of a fund set up for ‘free’. But only because conditions applied to the ‘free’ set up were not clearly stated. While advertised for ‘free’, ASIC declared that conditions for fund set up included an accounting services fee of $1,100 per year for at least of 2 years. ASIC acknowledged that RS Capital immediately took steps to correct its advertising and is developing improved processes for the sign-off of advertisements. Importantly, the payment of an infringement notice is not an admission of a contravention.

Was ASIC attacks SMSF promotor fair?

From my own personal experience, I pay a lot more than $1,100 in accounting fees for my own SMSF. So do the fat cats at ASIC that earn $400k plus and have their own SMSF. So I am not sure if that was ASIC’s true concern. Deep down I think that ASIC was more concerned about the spruiking of an SMSF. And for that, I think ASIC did a service to the community in taking on this ‘misleading’ advertising.

I think that ASIC Deputy Chair, Peter Kell should also have a look at what real-estate agents are spruiking to Self-Managed Super Funds. My poor suffering law graduate intern, after 13 hours research, has concluded that ASIC has received 218 reports of misconduct relating to SMSFs and real estate since 2013.

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