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Accountants warned on documentation traps with insurance

Unlicensed accountants have been cautioned by an SMSF auditor that providing clients with pre-filled documentation to clients containing insurance clauses could be classed as unlicensed advice.

Accountants warned on documentation traps with insurance
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  • mbrownlee
  • October 10, 2016
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Accountants are generating automated investment strategies from their accounting software that contains clauses specifying that the client has considered insurance without the client deciding for themselves, according to Tactical Super director Deanne Firth.

“I worry about this because they’re not licensed to give that advice and they’re printing them out from their accounting software program,” Ms Firth said.

“The trustee isn’t actually preparing the investment strategy themselves which puts the accountant at risk of the ASIC breaching licensing provisions.”

It is a requirement for SMSF trustees to consider the insurance needs of members, said Ms Firth. Despite this, many trustees and practitioners she said are failing to adequately address the matter.

“Trustees are just signing a clause saying ‘we’ve reviewed our insurance’. I don’t see evidence of people actually taking it seriously,” she said.

“Insurance does actually need to be reviewed annually. It’s not something you set and forget, because it does change, and it does change according to your circumstances.”

The warning has surfaced at a time when the regulators are being tipped to come down hard on the insurance industry broadly, particularly following its investigation into the sale of add-on insurance.

“I worry about this because they’re not licensed to give that advice and they’re printing them out from their accounting software program,” Ms Firth sai

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