AFA chief blasts advocacy group’s ‘baseless claims’ on SMSF recommendation

In a LinkedIn post on Friday, AFA acting chief executive Phil Anderson said recent comments made by Labor senator Jenny McAllister in Parliament around “shonky advisers” – which the association has said amount to vilification of practitioners in the industry – had come directly as a result of a recent submission from advocacy group Super Consumers Australia.

Mr Anderson said in its submission around the legislation Senator McAllister was responding to, which involved extending the number of members in an SMSF, Super Consumers had said it was concerned about the bill “[increasing] the potential for advisers to recommend an SMSF when it is not in a person’s best interests”.

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“There is a risk that advisers and accountants, in recommending an SMSF, may be able to charge higher fees than if they recommended a retail or industry fund. The key question is whether this risk would be greater because of this bill and whether there is anything more, (above all the existing obligations) that should be done to remove this risk,” he said.

“In terms of removing the risk of inappropriate advice, seemingly the only option is to force financial advisers to provide this advice at no charge. How else can this risk be removed?”

Mr Anderson pointed to subsequent submissions the advocacy group had made to ASIC’s advice affordability review and Report 627 on consumer trust in advisers, saying the group was “obsessed with conflicts of interest” in the advice sector and had incorrectly asserted that asset-based fees led to advisers “recommending products that are poor value”.

“This is a baseless claim that speaks to ideology and an obsession with adviser remuneration, rather than the value advisers provide,” he said.

“It is ironic to see Super Consumers Australia talk about the industry rebuilding community trust, when much of what they do and say, seems to be working in the opposite direction.”

Mr Anderson noted that after being initially handed $2.5 million in funding from CBA and ANZ fines for super mis-selling in 2013, the advocacy group had been given a further $1.7 million in this year’s budget.

“It would be interesting to know what if any accountability obligations come with this government funding?” he said.

“Many financial advisers will find this interesting, particularly when Super Consumers Australia has demonstrated little understanding of financial advice and has seemingly done much to undermine consumer confidence in financial advice.”