Tips to protect your SMSF against fraud


I know there has been a bit in the news of late about SMSF being targeted by fraudsters but what should you look out for and how can you research and report suspect approaches, sites or promotional material.

In 2012 Christine St Anne from Morningstar wrote an excellent piece called 6 tips to protect your SMSF against fraud

I would urge all SMSF Trustees to read this article and yes that means even YOU! The usual victim is not the usual victim! These scammers are targeting well-educated, internet savvy, experienced investors who they expect to do some checks and have built their systems to convince those initially skeptical people.

In the last 6 months I have seen beautiful glossy brochures offering guaranteed 52% returns using systems for trading shares and another on horse racing. I spent a good few hours researching the numbers and i could not fault the numbers. It is only when you go deeper in to the working that you realise that it is nigh on impossible to replicate what they have done without the benefit of hindsight and that the parameters they claim to control just are too vast and complex for a current system to overcome. IF IT WERE THAT GOOD THEY WOULD NOT BE SELLING IT AND WOULD BE EXPLOITING IT THEMSELVES!

I have seen websites that look and perform better than many Australian ASX 200 corporate websites with links to portfolio platforms, links to testimonials on other (also fake websites) backing up the service or system. They also cater for the skeptical with links to US or International fraud investigation sites that verify that the fraudsters website is genuine (again they have replicated a real agency’s site with only a slight change to the domain address. These sites can be designed an up and running in days using cheap programmers in India, china and the Philippines so never , never rely on a website as verification something is genuine.

In Australia:

  1. Look for the Australian Financial Service licence and check it against the register here
  2. Ask for prior years annual reports and a full Product Disclosure Statement

  3. Ask a financial advisor/Accountant/SMSF Specialist Advisor™/Lawyer to check out the PDS, offer or website for you. (We love weeding out the bad apples!)

  4. Ask who are the owners and who are the directors and Google them. If they are not prominent then the offer is likely dubious or at best speculative.

  5. Have someone drop by the office on the brochure or website and check it is real and not just a phantom or serviced. I know this sounds ridiculous but Suite 5X4 , lvl 3, XXX Kent St, Sydney may be a broom cupboard!

  6. Check http://www.scamwatch.gov.au ,  https://www.moneysmart.gov.au “Superannuation Scams Page” or at www.asic.gov.au but just because a scam is not listed does not mean its genuine so beware.

  7. If it is being pushed by someone claiming to be a Financial Planner or Adviser then check them out on ASIC’s Financial Adviser Register here and also on Adviser Ratings site here to see what people say about them.

Please add other tips via comments as we don’t want the SMSF sector targeted or the Government having to restrict our freedoms to protect against fraudsters.

Here is the link to the recent SMSF Adviser article :

SMSFs attractive for ‘fraudulent exploitation’, says ACC (Australian Crime Commission)

I hope this guidance  has been helpful and please take the time to comment. Feedback always appreciated. Please reblog, retweet, put on your Facebook page etc to make sure we get the news out there to do plenty of research first and only trust those that have earned our trust.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Magnitude Group Pty Ltd ABN 54 086 266 202, AFSL 221557

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

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