ASIC’s guidance to accountants. Is no news good news? Part 1

Prepared by Peter Hagias

ASIC issued INFO Sheet 16-425 late last year which provides unlicensed accountants and accountants operating under a limited AFSL with guidance on providing SMSF advice. However, sometimes what ASIC doesn’t say in its guidance is more interesting than what it does, and can be indicative of its policy indecisiveness.  Over three short information pieces we look at what ASIC didn’t discuss in its guidance. The first topic is execution-only services:

Execution-only services

Otherwise known as no-advice transactions, ASIC has not provided any guidance on if, when or how licensed and unlicensed accountants can rely on an execution-only service to undertake a financial service (i.e. set up a SMSF, pay a pension or make a non-concessional contribution) without first providing the client with financial advice.

The Corporations Act and Corporations Regulations provide some limited exemptions on dealing in financial products, but they or ASIC do not explain how that operates in the context of the best interests duty and whether accountants have a positive obligation to provide advice or inform their clients on the appropriateness or implications of the their instructions.

Until ASIC has issued its policy, we suggest exercising caution when relying on execution-only services.