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ASIC is reminding superannuation fund members it is best practice to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund into an SMSF.

In a release posted today, ASIC (a financial services Regulator) wrote that it has noticed an increase in marketing recommending Australians switch from retail and industry superannuation funds to self-managed superannuation funds (SMSFs) so they can invest in a ‘high return’ portfolio.

They noted that SMSF trustees are being targeted to invest in crypto-assets (or cryptocurrencies) and that Superannuation is an attractive target for scammers

ASIC noted that crypto-assets are a high risk and speculative investment.  They are reminding superannuation fund members it is best practice to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund into an SMSF

Setting up an SMSF is one of the most significant decisions you can make relating to your retirement savings. Before making the decision to set up an SMSF, ASIC writes that you should seek advice from a licensed financial adviser. Do not rely on social media ads or online contact from someone promoting an ‘investment opportunity’. Be wary of people ‘cold calling’, text messaging, or emailing you with a recommendation to transfer your super to an SMSF, or invest in crypto-assets via your SMSF.

Australians who decide to self-manage their super should consider the risks before using their SMSF to invest in crypto-assets. As the trustee of your SMSF, you ultimately bear responsibility for the fund’s decisions and for complying with the law even if you rely on other people’s advice – licensed or otherwise. ASIC recently issued warnings about an increase in scams involving crypto-assets.

ASIC’s Moneysmart website contains information on how to spot an investment scam, SMSFs and crypto-assets (or cryptocurrencies). The ATO website also contains information on superannuation scams.

If you decide to set up an SMSF, ASIC notes that you should seek professional advice to determine what investments to make. There are rules governing investments the SMSF can make and taxation consequences for investments, including cryptocurrencies. Any investment must be permitted under the fund’s trust deed and be in accordance with the fund’s investment strategy. When developing and reviewing your investment strategy you need to document how your fund’s investments will meet your retirement goals having regard to diversification, the risks of inadequate diversification, liquidity and the ability of the fund to discharge its liabilities. You must also be able to demonstrate that the fund owns the asset. The ATO website contains information about these obligations. A licensed financial adviser can assist you with formulating an appropriate investment strategy.

More information is contained on the ASIC website.

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This article is intended to provide general information only and has been prepared without taking into account any particular person’s objectives, financial situation or needs (‘circumstances’). Before acting on such information, you should consider its appropriateness, taking into account your circumstances and obtain your own independent financial, legal or tax advice. You should read the relevant Product Disclosure Statement (PDS) before making any decision about a product. Our financial services guide can be found on our website.