The SMSF Association has welcomed government plans to introduce a ‘new class of adviser’ (NCA) that will offer limited services to clients, but has questioned why accountants continue to be overlooked in the provision of advice.
The association stated the operations of the proposed NCA, released yesterday by Financial Services Minister Stephen Jones as part of the second tranche of the Delivering Better Financial Outcomes package, would help in reducing the cost of and improving access to advice, but more detail was still required.
The details of the package state NCAs could only provide advice on products issued by prudentially regulated entities and these will be set out in regulations thus preventing them from advising on areas such as SMSFs or managed investment schemes.
“This will allow these advisers to focus on simple topics that most Australians would benefit from more information on,” Jones said.
“It will also ensure that there is a clear boundary between the new class of adviser and professional financial advisers.
“It is the government’s vision that the new class of adviser serves as one entry point to rebuild the financial advice profession and the government remains committed to reforming the broader education pathways for financial advisers.”
SMSF Association chief executive Peter Burgess said reforms were needed to lower the cost of advice and boost the current number of practitioners, but with the government’s plan to create the NCA to provide simple advice, “it remains a mystery to us why the role other professional advisers, such as accountants, could play was still being overlooked”.
“It was our contention that the Quality of Advice Review neglected the significant role accountants can play in addressing the growing advice gap and the government is perpetuating this oversight,” Burgess added.
“By giving accountants a defined advice role, it will further support consumers to access the advice they need when they want it from their choice of trusted adviser.”
However, he welcomed the decision to allow Australian financial services licensees (AFSL) to charge for the advice provided by an NCA after the government shifted its position from allowing AFSLs to indirectly charge for their services by also allowing them to charge a direct fee.
“This will allow a greater range of institutions to employ the new class of adviser, delivering neutrality across different advice models and expanding the supply of quality advice available to consumers. The new class of adviser will not be permitted to charge ongoing fees or receive commissions,” Jones added.
