Red tape stifling advice sector

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:  

• Providing financial advisers access to superannuation tax portals; 
• Streamlining total superannuation balance thresholds; 
• Improving superannuation residency rules for SMSFs; 
• Repealing the work test; 
• Providing a practical approach to non-geared unit trust breaches; 
• Introducing an amnesty to convert legacy pensions to modern products; and 
• Introducing an effective spousal equalisation measure. 

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. 

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“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.”