Lack of knowledge is a “pervasive” problem in the self-managed super fund (SMSF) industry, according to the SMSF Professionals’ Association of Australia (SPAA), with inexperienced and potentially product-driven advisers entering the market.
There is a lot of “clutter” joining the advice market with practitioners making false claims about their level of specialisation and expertise, Andrea Slattery, chief executive officer of SPAA told SMSFAdviser.
“[For example] there’s a lot property spruikers and a lot of mortgage providers that are saying they can do loans for instance into SMSFs of property and so forth, and we need to be very careful that they know what they’re doing,” Ms Slattery said.
Ms Slattery also believes practitioners in SMSF advice should possess an undergraduate level of competence. She added those meeting only RG146 requirements “haven’t actually extended their knowledge enough”.
Practitioners who provide advice without adequate competence may not be meeting the needs of consumers, ultimately contributing to a risk of increased regulation and “reduced opportunities” in the SMSF space, Ms Slattery added.
Adam Goldstien, chair of SPAA’s NSW chapter, said the current “enthusiasm” for property since limited recourse borrowing arrangements (LRBA) were clarified is attracting advisers to the marketplace who are unqualified, inexperienced and potentially product driven.
“One of the issues I see facing the industry [is] everybody is a ‘specialist’ today because that's where the money is obviously,” Mr Goldstien said.
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