SMSF outsourcing compromises confidentiality
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Rachael Micallef is a journalist with InvestorDaily, a Sterling publication.
The outsourcing of self-managed super fund (SMSF) administration is compromising client confidentiality, a boutique SMSF administrator has said.
Keep it Simple Super (KISS) have said the offshoring of SMSF administration is becoming more common in the industry, creating ethical dilemmas for clients.
"I think most of us can accept that with the big banks they've got some banking details going overseas, but when you're thinking about SMSF administration, it's the whole picture," KISS director Julie Taylor told InvestorDaily.
"It's their address, their beneficiaries, their [tax file number] and really it's a big chunk, if not all, of their wealth picture going overseas.
"You've got a lot of people who have all of their money self-managed, so that full picture of their information is going offshore without them even know that it is happening."
Last month, the Accounting Professional and Ethical Standards Board (APESB) released APESB Guidance Note 30, providing specific details on the expectations of transparency when engaging in outsourcing agreements.
Taylor said this guidance note is a start, but it does not go far enough in ensuring that industry concerns are addressed.
"With what they've put in the guidance statement, it's a good start but it has no weight at all," Taylor said.
"There is a lot of pressure on financial planners these days in terms of disclosure and client best interest, but that's not translating to administration and accountants.
"When you read that statement you think, well the clever operators are going to work around the definitions that are in that particular statement."
As a result of increasing awareness and demand for transparent SMSF administration, KISS has expanded, bringing former Heffron client service manager Danny Mewett on board.
Mewett will take on the role of client service manager, as KISS keeps up with a growing need for their services.
"We're finding demand is growing steadily as accounting and advisory firms make the move to greater transparency in their SMSF administration, and Mr Mewett will play a key role in helping us meet that demand," Taylor said.