The SMSF Association has called on the Government to simplify the regulatory framework for the delivery of financial advice as it is currently “stifling” the advice sector.
In its Budget submission, the association said areas where the Government could reduce red tape were:
The association said the limited licence framework, which was implemented for accountants in 2016, failed and needed to be removed and transitioned to a new consumer-centric framework.
SMSF Association chief executive, John Maroney, said individuals had unmet financial advice needs, advisers faced high regulatory costs, and both accountants and financial advisers were strangled by regulation.
“Currently, SMSF trustees who wish to seek simple SMSF advice are either required to seek formal costly financial advice from a licensed financial adviser or must act without advice. This means there are important unmet SMSF advice needs in the market,” Maroney said.
The association believed the ability for professionals to provide specific single-issue advice or “scaled advice” was extremely limited and this limitation particularly affected superannuation advice.
“The complex limited licence framework for SMSF accountants and advisers, the carve out for intra-fund advice for superannuation trustees and the lack of clarity around scaled advice for fully licenced financial advisers are all evidence of this fact,” he said.
“An individual who seeks superannuation and retirement advice, whether it be from a financial adviser, accountant or superannuation trustee, should receive high quality and affordable advice with the same meaningful disclosure.
“In our opinion, therefore, providing a new overarching regulatory framework for superannuation financial advice is key to this process.”
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
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