“Getting trustees to sign things isn’t enough — do they actually understand what they’re signing? Because signing things is not going to work if the underlying transaction is not right,” he said.

“A journal entry to reflect something that happened doesn’t make the thing happen, so you can’t go into court and plead a journal entry. We need to have the underlying legal stuff done, the forms and the facts backing up a situation, not something signed by the client saying, ‘Yeah, it’s all cool’.”

Mr Hay-Bartlem gave the example of the in-house asset rules for SMSFs, which clients could often inadvertently breach through having distant connections with a co-investor or borrower that they did not realise were caught by the rules.

“If a client signs something and says we are not paid associates, can you rely on a normal person saying that? No, because they don’t understand the paid associate rules,” he said.

“There was a recent conflict of interest case in Adelaide where the judge looked at the person’s super arrangements and said they are so complicated that he couldn’t have understood them, and that was just an ordinary Unisuper interest, so getting a client to sign a bit of paper is not going to get you off the hook.”

Getting a signature from a client was not a fix for a retrospective compliance problem either, given the ease with which the client could still blame the adviser in a legal dispute, Mr Hay-Bartlem said.

“There was a change of trustee case in Queensland where a man started an SMSF with his daughter and they had a falling out, he then repartnered and took her off as a trustee and put the new spouse on and then he changed accountants,” he explained.

“The new accountant saw that the change of trustee three years earlier wasn’t effective, so he gave the documents to the client and the de facto and said sign these documents but don’t date them.

“When the daughter and de facto turned up in court fighting about who was the trustee, the de facto said we didn’t sign the documents on that date, the accountant told us to sign and not date them.

“Clients try and put advisers under the bus, so you’ve got to be careful about how you’re going to fix these types of issues up and not just be happy that the client is signing something.”