Unlicensed accountants warned on PDS compliance traps

DBA Lawyers director Daniel Butler said where an accountant provides a product disclosure statement in respect of an SMSF to the client for an execution only service they need to ensure the client doesn’t perceive this at the accountant providing financial advice.

“Before an accountant provides a PDS to a client, they should ensure that the PDS complies with the Corporations Act in respect of the short form regime and that the PDS is a factual document rather than a marketing document,” said Mr Butler.

“Some PDSs supplied by SMSF document suppliers are more akin to a ‘product spin document’, i.e., a PSD, rather than a PDS.”

Mr Butler said a PSD is designed to encourage a client to establish an SMSF and sets out the many advantages that an SMSF may provide.

He also said accountants should be proactive in notifying their SMSF clients that each SMSF investment strategy should be reviewed and updated on at least an annual basis.

“[The client should be told that] prior investment strategies, including any previous template documents provided by the accountant, should no longer be relied upon and the client should obtain financial planning advice from a financial planner with an AFSL as soon as practicable,” he said.

“Accountants who wish to continue without an AFSL need to make substantial changes to their services and processes to ensure they do not incur significant penalties.”