David Moss, who is accountant services director at the dealer group Merit Wealth, believes the incoming professional standards for advisers set by the Financial Adviser Standards and Ethics Authority (FASEA) will prompt anyone who wants to remain in superannuation and SMSF advice to seriously consider the commercial risks and viability of their services.
“Within the SMSF advice space you’ve got accountants who work in that space, you’ve got financial advisers who work in that space, but there is also a large number of accountants who quasi work in that space,” explained Mr Moss.
“They are not licensed and so they’re not giving financial advice but they’re straddling the line, they’re trying to work out where they sit.”
“Those straddling the lines will forced to make a decision, do they get licensed or not?” said Mr Moss.
For those that are licensed, there will be pressure from ASIC on the licence, and pressure from the industry for the licence and its advisers to obtain the right level of education, he said.
“The FASEA changes that kick in, in just over six months now, are going to drive massive changes within the industry, particularly around SMSF and superannuation advice because it’s now bringing a lot of attention to superannuation advice and raising the question do I need to be licensed or not for accountants,” he said.
While removing those who dabble in SMSF advice can be a welcome consequence of regulation, as previously reported, accountants with decades of experience and post-graduate level education are in the firing line.
Mr Moss’ projections are similar to what licensees and consultants to accountants have told SMSF Adviser since the FASEA guidance was initially released.
Director at Ariel & Associates, Jeremy Danon, fears the reforms could prompt accountants with a limited licence to cease their SMSF advice offerings, or be tempted into unlicensed advice.
“If ASIC are blind to this, then they are ignorant of the many accountants just giving “factual advice” and thus satisfying themselves that they are operating properly,” Mr Danon previously told SMSF Adviser.
“They are not licensed and so they’re not giving financial advice but they’re straddling the line, they’re trying to work out where they sit…..”
Perhaps they have already worked it out. They have decided to not be licensed and not give financial advice. They have also decided not to pay thousands of dollars of licence fees that will provide little benefit to them.
It is not rocket science.
Given the systemic, appalling behaviour being exposed at the Royal Commission by FP’s working in banks and dealer groups it seems a deflection to be worrying about accountants.
ASIC have also been asleep at the wheel as the Banking Royal Commission has reported. The un-natural response will be to lash our and slap some advisors very hard to make it look like they are doing their job.
The outcome of not doing the job properly will be a continuation of not doing the job properly – when advisors trying to do the right thing are penalised as an example to all.
Advise should be straightforward, cost effective and easy to understand. ASIC irregulation makes it obscure and very costly to access, assess and implement advice as a consumer. Why would you want to be an Advisor…?
“They are not licensed and so they’re not giving financial advice but they’re straddling the line, they’re trying to work out where they sit…..”
Surely it’s the regulator’s job to work out where they sit and issue clear guidance on what is required !
ASIC’s role, as stated on their website, is to:
* maintain, facilitate and improve the performance of the financial system and entities in it FAIL
* promote confident and informed participation by investors and consumers in the financial system FAIL
* administer the law effectively and with minimal procedural requirements FAIL
* enforce and give effect to the law FAIL
* receive, process and store, efficiently and quickly, information that is given to us UNKNOWN
* make information about companies and other bodies available to the public as soon as practicable FAIL
* take whatever action we can, and which is necessary, to enforce and give effect to the law. FAIL
ASIC have issued half thought through laws and incomprehensible impractical guidance. If any commercial supplier or employee behaved like this they would be terminated quicker than the time it takes to read this article.