Risks flagged with new automated SMSF products

Unlicensed accountants planning to use automated advice platforms and products at their practice need to be careful there is a clear divide between the accounting services they are offering the client and the advice that’s being provided by the computer system.

There is nothing wrong with [automated] advice, I’m actually all for it however the accountant can’t pass off that advice as being their own. They need to be very clear that advice is being delivered by a different AFSL through a computer system.

They can’t be discussing what the computer says in terms of advice, they can’t be trying to pass it off as their own. It needs to be quite a distinct hand-off to the computer system to deliver the advice.

If the accountant is seen to be giving the advice when they are not, this could lead to legal issues.

People always go to the person that has told them the information. This is why financial advisers end up in trouble. Some of the time, it’s the advisers’ fault but some of the time it’s not, it’s the product providers fault.

Clients who have experienced losses or other negative outcomes as a result of advice they’ve been given will always go to whoever their contact is.

So if people have gotten involved in dodgy investments, they’ll go to the adviser that told them about those dodgy investments. If people have been given dodgy advice from a robo-advice system, they’ll go to the accountant who sat with them while they entered all the information into the system.

At this point, it really doesn’t matter what the legal contract says in the background. They are the person who is going to get their name dragged through the mud from a reputation perspective. They are also the person from whom the client is going to be looking for compensation.

For accountants who are licensed, it is vital they operate under the premise that evidence is everything for ASIC. Unless accountants can substantiate that they have fact finds, statements of advice and compliance plans, they could be in a great deal of trouble when ASIC comes knocking.