You have3 free articles left this month.
Register for a free account to access unlimited free content.
You have 3 free articles left this month.
Register for a free account to access unlimited free content.
Powered by MOMENTUM MEDIA
lawyers weekly logo
Powered by MOMENTUM MEDIA

SMSFA unhappy about accountants’ exclusion from advice

news
By Keeli Cambourne
December 15 2023
2 minute read
4 View Comments
peter burgess smsf
expand image

The SMSF Association has issued an open letter to its members stating it has strong reservations about some key aspects of the government’s proposed QAR reforms.

Peter Burgess, SMSFA CEO, stated in the letter that although the association believes there are some positive aspects to the government’s final response to the QAR, it has some concerns over several issues including the exclusion of accountants.

He said the SMSFA welcomes the proposal to introduce a “modernised and flexible best interests’ duty that will see the removal of the ‘safe harbour’ steps”.

 
 

“When coupled with the replacement of statements of advice (SOAs), we believe these changes will make a material difference to the cost of advice,” he stated.

He continued that it was “pleasing” to see the government’s announcement confirming that the Financial Planners and Advisers Code of Ethics 2019 will be reviewed following the implementation of the package. However, he added that it will be essential to ensure that the code is fit for purpose and operates as intended.

“Concerns have persisted since the implementation of the code and whether it operates as intended alongside existing legislated obligations,” he said.

“Aspects of the code have been a cause for concern for some time, with a review and remediation overdue.”

Additionally, Mr Burgess stated that an alternative advice framework for the superannuation sector was anticipated and is necessary for the large superannuation funds to wholly discharge their duties under the retirement income covenant.

He noted that it was quite unexpected to see the banks included in these reforms.

“We acknowledge the need for broader advice to be available to consumers. But the introduction of a new category of adviser called a ‘qualified adviser’ has the potential to be misconstrued,” he said.

“It certainly requires much further consideration. At this stage, it is difficult to assess the impact of this new category of adviser when the scope of advice, and the education requirements, experience, and supervision requirements which underpin it, have not been released.”

The most concerning aspect of the proposed reforms according to the SMSFA is the exclusion of accountants.

“Despite accountants’ advice being included in the QAR terms of reference, there was again no mention of accountants, and the role they play in the advice process in the final report,” Mr Burgess said.

“The lack of a suitable model for appropriately qualified and experienced accountants is an opportunity lost and a poor outcome for consumers. It leaves a critical gap in the financial advice framework, particularly for SMSF trustees who have ongoing advice needs not involving product placement, portfolio management or discreet investment advice.”

He added that the limited licensing model is “dying” and as of 30 November 2023, only 598 accountants who are limited licensed advisers remained.

“Increasing licensing costs, ASIC adviser levies and now the compensation scheme of last resort will see this cohort continue to exit advice at a time when more licensed advisers are urgently needed. Put simply, it is not fit for purpose,” he said.

In conclusion, Mr Burgess said there have been some notable omissions in the proposal such as the Design and Distribution Obligations (DDO) measures (Recommendations 12.1 and 12.2).

“The existing DDO provisions add layers of reporting and administration obligations which do little to enhance consumer protection,” he said.

“The QAR recommendations were, in our view, practical measures that sought to remove unnecessary regulation and red tape.”

You need to be a member to post comments. Become a member for free today!

Comments (4)

  • avatar
    I have a problem with the Labor Government making super laws
    as they have a financial interest in the outcome

    Industry Super Funds are predominately controlled by the Unions
    These Unions then in turn fund the Labor Party
    If the Fund makes more money the Union makes more money and the Labor Party
    then makes more money trough donations

    These groups have all got to be linked under Labor Party rules

    Hence if the Government can then make it hard for SMSFs and also let the Union Funds control
    the advice -   They are currently dressing all this up as a win for the members - However they 
    are also more difficult for accountants and financial advisors which is the competition

    However the Labor Party has a massive conflict of interest in this space and i would question 
    their rights and authority  to even make laws on the topics of financial advice and superannuation

    I think there could also be a Trade Practices Issue re ante competitive behaviour

    Am I overlooking something?
    1
  • avatar
    SOA fee started from $1000+, which put away a lot of comsumers who need just a smiple tax advice such as salary contribution, 
    1
  • avatar
    Thanks for the show of support Peter/SMSFA.  I moved out of the limited model 2 years ago.  It was a financial and emotional millstone.  We try to do the right thing and get gouged and pilloried!
    Corporations Law provides for recognised accountants.  I guess they will now facilitate "qualified advisors".  Who would the public prefer to deal with?  A largely independent fully qualified professional with indemnity insurance and who has mandatory ethical training or an employee of the organisation with a largely vested self-interest?
    All I can say is successive governments and ASIC have proven themselves to be the most spectacular gymnastic team I have ever seen.
    2
avatar
Attach images by dragging & dropping or by selecting them.
The maximum file size for uploads is 10MB. Only gif,jpg,png files are allowed.
 
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
Posting as