The Australian Securities and Investments Commission (ASIC) recently visited 24 newly-licensed financial advice businesses, querying advice processes, business models and approaches to risk and compliance.
These licensees represent one quarter of advice licensees that obtained their Australian financial services (AFS) licence between July 2011 and June 2012, according to ASIC.
The findings indicate that while 83 per cent of the licensees offered SMSF services, only 48 per cent of those licensees required their advisers to complete additional training on SMSFs.
“Licensees need to carefully consider whether their advisers are adequately trained for the advice they are authorised to give,” ASIC stated.
Further, ASIC’s review of the 21st to 50th biggest AFS licensees in REP 362 indicated SMSFs are one of the products most advised on, ahead of exchange traded funds, industry and corporate super funds.
Few licensees advised on products known to be relatively more complex or risky, such as derivatives, managed discretionary accounts, debentures and tax-effective schemes, the report said.
And therein lies the problem. NO standards set across the dealer groups or enforced by ASIC. In my dealer group – if no accredited training – no advice. The benchmark should be set for ALL who advise, especially in specialists areas such as SMSF, whether an accountant, planner or industry adviser and especially tax agents.
And why are they not requiring the same skill set from all accountants? Why are accountants a protected species?