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Comprehensive advice important for SMSFs

Rachael Micallef  |  04 Feb 2013Text size  Decrease  Increase  |  

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Rachael Micallef is a journalist with InvestorDaily, a Sterling publication.


Self-managed super fund (SMSF) trustees should rely on holistic advice when building their retirement savings, according to Hewison Private Wealth.

While scaled advice options form a core part of upcoming industry reforms, Hewison said the new provisions should not take the place of more comprehensive advice when it comes to SMSFs.

"If you're going to set up an SMSF, you've really got to think about your total affairs overall, so you need comprehensive advice to make sure that it's appropriate to a client's need," Hewison Private Wealth director Chris Morcom told InvestorDaily.

"Someone might come in and say they want to set up an SMSF but an adviser should enquire about why a client wants to take this particular course of action, before just agreeing to go off and do it."

While holistic advice should remain the focus of advice for SMSF trustees, Morcom said scaled advice options could still play a role in the sector.

"If you've already got an SMSF in place and you just want someone to give you advice on part of a particular investment strategy, then scaled advice could work," Morcom said.

"The trustee could potentially access advice through that scaled model to meet their needs in that way."

Morcom said despite the interest around scaled advice provisions, the reforms are just formalising an option that was always available.

However, he did say it is important that clients are aware of the level of advice they are receiving from their financial planners.

"We don't think it's a new thing, it's just formalising what you have been able to do in the past and ASIC have said that," Morcom said.

"The concern I would have is ... if people are getting into a relationship, thinking they're going to get comprehensive advice and they're getting scaled advice back. That's a problem."