“There might be reasons why someone wants to start a SMSF with a lower balance, but that has to be articulated,” Ms Maynard said.

“There can be a statement claiming reasons why it might be appropriate. But if I look at that, on the face of it, it doesn’t look good. You’d have to have good reasons why that’s appropriate.”

Another recurring defect in SMSF advice is the use of gearing where it has no clear and obvious benefit, Ms Maynard said.

As an example, Ms Maynard said she’s seen instances of gearing strategies being used within a super fund where the taxation benefits are not as substantial as they would’ve been if gearing was used outside of a super fund.

“We don’t understand why that happens, and it’s another defect we see,” she said.

Ms Maynard also stressed that practitioners “must, must, must” consider their clients’ insurance situation when it comes to advising on their SMSF. This is another key and ongoing area of dispute that FOS sees, she said.

“It may be that some superannuation has to be left in the previous fund so that people can retain those covers,” she said.

“Or, you need to ensure, if the client is going to another provider to arrange insurances, that they are in place before the money is moved to the SMSF.”

Ms Maynard also noted a key defect in SMSF advice is that clients are not obviously capable of understanding and undertaking their role and responsibility of an SMSF trustee.

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