Speaking at the SMSF Association National Conference 2021, ASIC commissioner Danielle Press said the regulator’s Consultation Paper 332 on reducing barriers to affordable advice had received over 480 submissions.
The commissioner noted that the majority of those received had come from advisers and the accounting profession, and common themes were beginning to become apparent when it came to problems with advice delivery for the SMSF sector.
“The SMSF Association has commented that the current advice process is too lengthy, too costly and prioritises compliance and the needs of the licensee over the consumer,” Ms Press said.
“This is broadly consistent with the themes we have seen emerge through other submissions that we have reviewed to date.”
Ms Press said the first quarter of 2021 will see the regulator take in all the considerations raised in submissions, noting its plans to hold roundtables with key industry groups and licensees, to dig deeper into issues and determine potential solutions.
Ms Press noted that instilling a healthy and sound SMSF sector will be a key priority for ASIC in its superannuation mandate for 2021.
“To achieve a healthy and sound sector, consumers need to be able to make confident and informed decisions about setting up and managing an SMSF and that management is based on good, appropriate and accurate advice and information,” she said.
Ms Press outlined one of the priorities that will be important for the SMSF advice sector this year will be focusing on the Unmet Advice Needs project, which is an umbrella project looking at where and when consumers need advice and where the system can provide that advice.
“We are now actively engaging with the industry about the practical steps to promote good-quality and affordable advice for consumers, and we are conducting research on the cost of advice as well as looking at where consumers need to take advice to make informed decisions,” she said.
Increased focus on unlicensed advice
Further, the commissioner stated another important project ASIC is focused on is homing in on unlicensed advice plaguing the SMSF sector.
“Last year, we became concerned about the possibility of increasing levels of unlicensed advice as operators looked to take advantage of vulnerable consumers during the COVID pandemic,” Ms Press said.
Ms Press said ASIC had adopted a more significant focus on inappropriate advice being given by those not caught by the licensing regime.
“The role of the working party is to identify cases of unlicensed financial product advice and take action where that is appropriate,” she said.
“In some cases, ASIC will write to entities that may be engaging in unlicensed conduct and may be unaware of the need for a licence to warn them of potential consequences.
“In other cases, ASIC continues to investigate and will take enforcement action where it’s required.
“The provision of misleading information about SMSFs undermines the sector and limits the ability of Australian consumers to make confident and informed choices. In that respect, ASIC continues to be ready to take action where we identify information that is misleading about SMSFs being provided to consumers.”
FOFA is now almost 10 years old. ASIC should consider engaging an external auditor to go through this provide feedback, implement the feedback and get on with the job we are paying them to do! . . . . The recommended process for any business which is operating inefficiently. Would be money well spent – but only if ASIC have the wherewithal to go through the process.
ASIC is just the nanny state on steroids. Why must we constantly be ‘protected’ by others. No sensible person who runs their own fund tries to lose money. Just leave us alone. Perhaps if we made a mistake we would be wiser next time. It is our money.
ASIC’s entire leadership team are career lawyers and economists. Not one of them has ever worked as a financial planner. Not one has ever advised a client or prepared an SOA. They are simply incapable of fixing what they don’t understand.
I think Commissioner Danielle Press was previously the CEO for Equip Super (with a FP team) and the Myer Family Office (big FP team).
Sorry ASIC and Ms Press, you have done nothing but massively increase BS REGS and Advice costs for 20 years.
And now you supposedly need Advosers to tell you what is so bloody obvious.
STRANGULATION BY EVER INCREASING BS REGULATION.
You have completely lost any plot you had ASIC and will likely make it worse.
At the same time expand Hidden Commissions Funded, conflicted Intra Fund Advoce for your Industry Fund buddies.
Agree completely.
Isn’t it ironic that ASIC is asking the industry what are the barriers to providing affordable advice, when the biggest barrier has clearly been ASIC itself. Something about a dog chasing its own tail comes to mind…….
I can guarantee the reason why advice is unaffordable won’t be ASIC according to ASIC
“The role of the working party is to identify cases of unlicensed financial product advice and take action where that is appropriate,” she said. “In some cases, ASIC will write to entities that may be engaging in unlicensed conduct and may be unaware of the need for a licence to warn them of potential consequences.
If anybody can read ASIC Info Note 216 and give me a solid conclusion whether my SMSF services (which don’t even make ‘recommendations’ on product) needs an AFSL+SOA or not then they deserve a gold medal. If I am getting this wrong then I genuinely look forward to ASIC writing to me to clear this up. Get on with it!!! Put us out of our misery. Which of my staff can do what???
All we want is clear rules for what we can and can’t do and we will do it. Not links to a labyrinth of contentious legislation and half-hearted “guidance” about it. These laws were written when “advisers” were just commissioned salesmen for insurance companies. Hurry up ASIC you are killing us.
Hi Anne. You are exactly right. All we have to rely on is info 216 & the CAANZ & CPA Joint Industry guide about what an accountant can and cannot do. But have courage. Most of the confusion is based on hype generated by the FP industry. They lobbied hard to get the accountants exemption removed thinking it would be a gravy train, but self directed smsf trustees are not interested in the generic advice they offer. I found ASIC Info 216 a liberating document. When SMSF trustees ask for the laws to be explained, that is our job. The compliance & tax legislation exists so explaining and deciphering it is a necessary service. Factual advice is not meant to influence. The ASIC position that factual advice can still influence is what they need to clarify. We all know the super tax concessions are generous, so if they sound good on paper when explaining them, that is not intended to influence, it is the law of the land!