Industry association calls for SMSF advice inquiry
The SMSF Association has called for a government inquiry into self-managed fund advice and how it fits into the broader financial services regulatory system, saying the licensing system as it currently sits has failed advisers, accountants and trustees.
SMSF Association chief executive John Maroney said the recent Treasury review into the Tax Practitioners Board, which closed on 30 August, had highlighted that the government needed to go beyond a return to the accountants’ exemption to get the SMSF advice process to function effectively.
“We believe that to get the right regulatory structure for SMSFs is probably a task beyond this review, and that it requires a broader inquiry that obtains input from ASIC, FASEA, professional bodies and consumers,” Mr Maroney said.
“We strongly advise the review make a recommendation recognising this issue of SMSF regulation and that government seek to address the issues relating to SMSF advice at an overarching level as soon as possible.”
Mr Maroney said the association had not advocated for a return to the accountants’ exemption in its submission to the TPB review, as it recognised that any regulatory changes around SMSF advice had to work for both advisers and accountants.
“From our perspective, the issue that needs resolving is how basic SMSF services fit into the entire financial sector regulatory framework for accountants and financial advisers,” he said.
“Essentially, the outcome should improve consumer protection, ensure unscrupulous advice is prohibited and allow consumers to receive basic SMSF advice efficiently.”
Mr Maroney said under the current system, too many SMSF trustees still had unmet advice needs as they had to choose between formal and expensive financial advice or making decisions without an adviser.
“Furthermore, the ASIC exemptions available to accountants are complex, unclear and do not provide protection to consumers for whom an SMSF is inappropriate or those seeking simple advice,” he said.
“In addition, licensed advisers who provide the same service that an accountant provides, via an ASIC exemption, are required to document this through costly statements of advice.”
