CA ANZ flags challenges to affordable SMSF advice
Heading into 2021, with ASIC’s review into what impedes affordable advice, a major accounting body has flagged the need for a breakthrough, as continued barriers will mount for SMSF professionals.
Speaking to SMSF Adviser, CA ANZ financial advice leader Bronny Speed said that it has been three years since it began working with members to resolve the strategic advice puzzle piece by piece, and as the profession makes its way into 2021, SMSF and accounting professionals hope that improvements could be finally made to address the current regulatory framework which would benefit accountants, advisers and consumers themselves.
“Clients want a one-stop shop for their financial recovery strategy from the pandemic and members want to be able to provide strategic advice for which they are highly qualified to do, without stepping into product advice which rightfully requires an AFSL,” Ms Speed said.
“When ASIC provided temporary relief to tax agents and financial advisers for the early access to super measures, they mobilised a group of ready, highly qualified professionals to address a need.
“There is now a similar need for Australian businesses and individuals to access high-quality, single-issue advice in superannuation to assist with a COVID-19 recovery.
“Longer term, a strategic model for the industry that delineates product advice from strategic recommendations needs to be developed.”
Ms Speed said that the regulator needs to resolve the specific barriers under AFSL which is one of the main barriers facing professionals who want to provide advice on superannuation or SMSFs.
“If members provide advice via an AFSL, limited or full, the process for limited advice is complex, time-consuming and hence expensive, and as they are predominantly paid on a fee-for-service basis, clients don’t want to pay big fees for work they believe members should be able to provide in the ordinary course of their business advice,” she said.
“The two biggest challenges to providing good-quality limited advice are reducing the costs of limited financial advice and the retention of highly qualified advice professionals.
“Given the costs of providing advice coupled with compliance risks, as well as the conflicts across regulators and licensees, the provision of good-quality advice is becoming increasingly unattractive.
“CA ANZ holds grave fears that if interim and longer-term solutions are not implemented, many of our members will leave the financial industry on or soon after 30 June 2021, which would be a considerable loss for everyday Australians who need advice.”
Previously, an industry body had also stated that larger AFSLs are imposing excessive layers of compliance and restricting SMSF advice due to fears around potential breaches and ASIC penalties.
Tony Zhang
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.
