ASIC’s recent review of self-managed super fund (SMSF) advice has raised important considerations for the advice industry — particularly for boutique Australian Financial Services Licensees (AFSLs).

The regulator’s Report 824: Review of SMSF Advice highlighted ongoing issues with advice quality, documentation, and compliance with the best interests duty. It’s important to note that the report reviewed a targeted sample of licensees based on risk indicators – it was not random or representative of the financial advice sector.

Even so, the implications extend directly to boutique AFSLs, where oversight and resource constraints can make it challenging to maintain consistent advice quality across all representatives. For smaller licensees, the findings are less about regulatory alarm bells and more about practical lessons. The review serves as a timely reminder of the systems, supervision, and culture needed to ensure SMSF advice meets the expectations of both clients and ASIC.

What ASIC Found

ASIC reviewed 100 client files from retail clients who had recently received personal advice to establish an SMSF or make an initial rollover to an SMSF.

The results showed that:

• 62% of the advice files failed to demonstrate compliance with the best interests duty and related obligations.
• 27 files (27%) contained significant concerns about client detriment, including cases where advisers recommended SMSFs that were unsuitable and likely to harm clients’ lifestyle and retirement outcomes.

ASIC also noted that some licensees lacked clear policies or file-review frameworks to identify and address these issues before advice reached clients.

Why It Matters for Boutique AFSLs

For boutique AFSLs, the review underscores the critical role of culture, governance, and supervision — areas that can be difficult to scale in smaller operations. While many boutique licensees pride themselves on high-touch service and close adviser relationships, the report shows how easily even well-intentioned practices can fall short without structured processes.

Key risks for smaller licensees include:

• Over-reliance on individual adviser judgment: In small practices, advice often relies heavily on adviser experience. Without strong peer or compliance review, untested assumptions about SMSF suitability can slip through.
• Limited resources for compliance monitoring: Boutique AFSLs may not have dedicated compliance teams or automated tools to conduct consistent file reviews, leading to missed red flags.
• Documentation gaps: ASIC’s findings suggest that even where advice was broadly appropriate, inadequate record-keeping and lack of supporting evidence often led to findings of non-compliance.

Rather than viewing these as weaknesses, boutique AFSLs can see this as an opportunity to tighten frameworks in a way that fits their size and model.

Embed ASIC’s INFO 274 to Elevate SMSF Advice Quality

One of the most practical steps boutique AFSLs can take following ASIC’s review is to embed the guidance from ASIC Information Sheet 274 (INFO 274) into their advice process.

INFO 274 sets out the key factors advisers must consider when assessing SMSF suitability, including:

• Client capability and engagement — Does the client understand trustee responsibilities and have the time and skills to manage an SMSF effectively?
• Cost comparison — Are SMSF costs justified compared to retail or industry funds?
• Risk and complexity — How do investment choices and compliance obligations align with the client’s risk tolerance and financial literacy?

ASIC’s review found that many advisers failed to document these considerations, leading to non-compliance and potential client harm.

By integrating INFO 274 into templates, training, and file reviews, boutique licensees can:

• Demonstrate evidence-based advice — Showing clear rationale for SMSF recommendations strengthens compliance and client trust.
• Reduce regulatory risk — Aligning with ASIC’s published expectations helps avoid adverse findings in future reviews.
• Enhance adviser confidence — Structured guidance supports consistent, high-quality advice across the licensee.

In short, INFO 274 isn’t just a regulatory reference — it’s a practical tool for building advice quality and reinforcing a culture of professionalism.

Other Practical Lessons from ASIC’s Findings

Re-examine the “why” behind SMSF advice
ASIC’s message is clear: the decision to recommend an SMSF must be grounded in clear, evidence-based reasoning that considers alternatives. For licensees, this means reinforcing expectations through templates, adviser training, and file-review checklists that require explicit comparisons with retail or industry fund options.

Strengthen file review and escalation processes
A structured review framework doesn’t have to be complex. Even small licensees can implement a risk-based approach that targets SMSF advice for additional pre-vetting or periodic audit. Ensuring reviews are documented — not just discussed informally — helps demonstrate a culture of active supervision.

Focus on record-keeping and rationale
Licensees can support advisers by providing simple but robust templates that prompt clear articulation of the client’s goals, alternatives considered, and reasons for recommending an SMSF structure.

Provide ongoing technical and compliance education
ASIC noted a lack of understanding among some advisers about SMSF costs, responsibilities, and suitability. Licensees should maintain structured continuing education programs that blend technical SMSF knowledge with compliance refreshers — particularly around best interests duty and advice documentation.

Leverage technology proportionately
Regtech solutions can help small AFSLs manage monitoring and record-keeping more efficiently, but they must be tailored to the scale of the business. Automation should support, not replace, the human oversight that’s central to quality advice.

Building a Culture of Quality Advice

Beyond policies and templates, ASIC’s report points to the importance of culture. Boutique AFSLs that cultivate open discussion about advice quality — where advisers feel supported, not scrutinised — are better placed to catch potential issues early.

This involves:

• Encouraging peer review and file sharing between advisers to build consistency.
• Embedding compliance discussions into regular meetings rather than treating them as standalone exercises.
• Framing compliance as part of professional standards, not an administrative burden.

A strong advice culture ensures that quality is sustained as the business grows or new advisers join.

A word of caution: ASIC has repeatedly highlighted that conflicted business models can compromise advice quality, leading to advice conflicts and failures to prioritise clients’ best interests. Boutique AFSLs should be mindful of how remuneration structures and referral arrangements align with their advice culture and governance framework.

Where to From Here?

ASIC’s findings are a reminder that the fundamentals of good advice haven’t changed — they’ve simply been called out again. For boutique AFSLs, the opportunity lies in demonstrating that they have:

• Thoughtful processes that fit their business model
• Practical, consistent supervision
• A culture that values evidence and transparency.

By addressing the gaps highlighted in ASIC’s SMSF review, boutique licensees can not only reduce compliance risk but also strengthen client trust — a core advantage in a market that increasingly values independence and accountability.