Pensions being lost in advice regulation discussion
With the Quality of Advice Review currently looking into the advice framework for accountants, a compliance expert warns that pensions advice is an area being missed in the discussion.
Speaking in a recent webinar, Holley Nethercote general manager Kath Bowler explained that while the Quality of Advice Review will not see a reinstatement of the accountants’ exemption, it will be looking at recommendation 7.2 of the Tax Practitioners Board Review around what advice accountants can or cannot give.
Ms Bowler noted that a range of accounting and financial advice bodies and associations have been lobbying together as one on this review.
“What they’re suggesting, which looks like a good solution, is that if advisers are regulated under ASIC, then perhaps accountants should be regulated fully under the Tax Practitioners Board. That’s the proposal, and I think that’s more palatable because it would suggest a level playing field with both [professions] regulated, just under different regulators,” she said.
Speaking in the same webinar, Smarter SMSF chief executive Aaron Dunn said there are already disciplinary processes and code of ethics requirements that exist for accountants under their accounting bodies.
“If you look at if from a qualification point of view, the requirements that must be upheld as a public practitioner include holding a public practising certificate and being registered with the Tax Practitioners Board as well. So there is already a framework that exists for accountants generally that match up and may what financial advisers need to have under ASIC at this point, or anyone that would need to be registered under ASIC at this point in time,” he explained.
Ms Bowler noted that some of the accounting bodies are lobbying for a public practising certificate as well as some form of SMSF specialisation to tick the qualifications box as opposed to degree entry, which is what’s required for financial advisers.
What is not clear yet, said Ms Bowler, is what the framework might look like to ensure the advice is appropriate.
“For licensed advisers, that’s the best interest obligations and then the disclosure obligations, which are under a lot of review at the moment by the Australian Law Reform Commission,” she said.
“I think for this to be palatable across the board and for there to be a level playing field, there will have to be some sort of disclosure.”
Ms Bowler said this might be some simple level of disclosure to demonstrate that the advice is appropriate.
She noted that the best interests duty is also being looked at as part of the review.
Mr Dunn said that different industry associations and bodies might have differing views on what should and what shouldn’t get covered in terms of what advice accountants can provide, so it’s vital that SMSF professionals engage with their professional associations or bodies.
“There has been some conversation around looking at set-ups, wind-ups and contributions, but there’s been a bit of a view that they didn’t think there’d be much needed on pensions, which I found quite staggering,” he said.
Ms Bowler stressed the importance of ensuring professional associations understand the sorts of advice practitioners provide on pensions.
“They’re all lobbying as one on this, and there’s a hope that they might have some success, but the last thing you’d want is for them to have some success but get a solution that doesn’t actually work, particularly around that pensions piece,” she warned.
“Engage with your professional bodies on this to make sure they understand the sorts of advice you give in relation to pensions as much as they do contributions,” she said.
“I’m not sure whether they’ll have success on set-ups and wind-downs, but pensions seem to be just forgotten almost.”
Miranda Brownlee is the deputy editor of 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 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.