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Darin Tyson-Chan is a journalist with InvestorDaily, a Morningstar publication.

Advisers looking to switch their clients into a self-managed superannuation fund (SMSF) from another form of retirement savings vehicle must satisfy the legal requirements of establishing a reasonable basis for this type of rollover in all circumstances, according to Midwinter national distribution manager Peter Burns.

"There is a bit of a misconception in the marketplace that if a client walks in the door and says, 'I'm looking for an SMSF and could you set one up for me please,' that the regulations regarding section 945A and 947D of the Corporations Act 2001 don't apply," Burns said.

"That is not the case. Advisers must meet a reasonable basis to roll over even where the client has requested they want to set up an SMSF."

Burns pointed out that to satisfy section 945A, often referred to as the suitability or reasonable basis of advice rule, three elements must be satisfied.

"Firstly, the adviser needs to ensure they made reasonable enquiries into the personal circumstances of the client. Secondly, consideration needs to be given to the subject matter on which the advice is being given. In these cases it would be a superannuation rollover. And finally, the adviser needs to ensure the advice is appropriate to the client," he said.

Similarly, he emphasised advisers would need to satisfy four main elements in relation to section 947D.

"The first of these is the adviser needs to have looked at and considered the client's existing product and whether or not it is suitable and if it isn't suitable, the reasons why it isn't," he said.

The second element is cost, which involves how much it will cost the client to exit their existing fund and how much it will cost them to set up an SMSF.

"The adviser also has to look at the benefits that are gained and lost as a consequence of the switch and any other resulting consequences the client might face from the switch," Burns said.