Financial advice practitioners have described compliance relief for advice relating to early access to access superannuation benefits as a result of the COVID-19 pandemic as impractical, according to the SMSF Association (SMSFA).
The relief was introduced in mid-April by the Australian Securities and Investments Commission (ASIC) as a temporary measure to enable people to access funds under relief provisions provided by the government.
The finding comes from feedback the SMSF Association garnered from accountants and advisers about the ability to issue a record of advice instead of a statement of advice relating to services provided to individuals for them to legitimately redeem a portion of their retirement savings early.
“The feedback that we expected and understood was the relief wasn’t really practical enough, people said they didn’t have time to utilise this and people were still reverting back to statements of advice just so they could have everything on file because they were nervous about the record of advice,” SMSF Association policy manager Franco Morelli said during the industry body’s latest member webinar.
“So there were still a number of things holding people back from [using] that simple disclosure [regime].
“Some people were able to give requisite advice anyway, they didn’t need the relief, because [the client’s] circumstances hadn’t changed.”
Morelli confirmed the findings will be shared with ASIC and revealed the SMSF Association still considers the initiative as a positive direction for the way financial advice might be provided in the future.
“We think this could be a good stepping stone and a good platform to build on around shorter advice documents going forward. It’s good ASIC is listening to the [industry] bodies and trying to get shorter documents out there for certain pieces of advice,” he said.
“It’s something that could happen in the next couple of years, you know, shorter advice documents, real strategic time advice, scaled advice that doesn’t need long statements of advice.”
ASIC announced earlier this month that all COVID-19 financial advice compliance relief measures would end on 15 October 2020.
