SMSFA backs FSC white paper on advice reforms
The new advice reforms outlined in the recent FSC white paper will align industry goals of modernising financial advice and enhancing the professionalisation of the advice sector, according to the SMSF Association.
The Financial Services Council (FSC) has recently released the White Paper on Financial Advice, a blueprint for a simplified regulatory framework.
SMSF Association deputy CEO and director of policy and education Peter Burgess said the white paper, which was underpinned by analysis by KPMG, very much reflected what the association said in its submission to ASIC on its Consultation Paper 332 – “Promoting Access to Affordable Advice for Consumers”.
“In that submission, we noted feedback from our members that the advice process is lengthy and costly. Our priority is for reform that reduces complexity, improves efficiency and drives harmonisation to better enable the provision of affordable, accessible and quality advice to small businesses and consumers,” Mr Burgess said.
“So, a white paper that proposes reforms that will benefit clients and advisers, deliver cost savings, and practical, relevant advice that consumers will understand and engage with gets our full support.
“In particular, we note that the FSC is calling for the need to restrict specialised advice to those who are authorised to provide that advice and that this necessary reform should be enforced through standards.
The importance of education and specialisation are also key components of the association’s core beliefs, according to Mr Burgess.
“In our ASIC submission, we said that advisers who provide advice to individuals about SMSFs should have specific SMSF education and qualifications that underpin their advice,” he stated.
“The Productivity Commission, in their final report (Superannuation: Assessing Efficiency and Competitiveness), recommended that SMSF advisers should have a form of specialised qualification to provide SMSF advice.
“This was also supported in ASIC’s Report 575 where the regulator suggested that SMSF advice would be improved by raising education standards with a specific SMSF qualification for advice providers wishing to provide SMSF advice.”
Mr Burgess said FSC’s justified assertion that the “financial advice industry has reached an important milestone – it has become a profession” should be a clarion call for the industry to call for the modernisation of the complex and costly regulatory framework it is enmeshed in.
“This is where the KPMG analysis is so pertinent, highlighting why the changes the industry is advocating for will reduce the cost of advice and open it up to more consumers.
“Our ongoing work with the government, regulators and stakeholders on essential reforms to financial advice continues as we look forward to the detailed government review into financial advice due in 2022.”
Tony Zhang is a Journalist at SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2020, Tony has covered various publications across the legal, financial and professional services sectors including Lawyers Weekly, Adviser Innovation, ifa and Accountants Daily.