The SMSF Association has given its support to the changes to the draft legislation covering the professional standards of financial advice.
The amendments announced last week mean new education and exam requirements for advisers will now come in on 1 January 2019 instead of 1 July 2017. This change gives existing advisers five years to reach degree equivalent status and two years to pass the mandatory exam.
SMSF Association chief executive Andrea Slattery said the move would give existing advisers a higher degree of flexibility in making their move to achieving their adviser status within the new Future of Financial Advice reforms.
“The fact this change includes the ability for the new standards-setting body to exempt ‘highly experienced advisers with exceptional skills and qualifications’ from sitting the new industry exam is due recognition of their standing in the industry,” Slattery said.
She added advisers should not look to postpone their attempts to achieve higher levels of competency just because the applicable time frame had been extended.
“This is an opportunity for the financial advice industry to prove its professionalism and trustworthiness to consumers,” she said.
In another development, the SMSF Association has called for contributions caps to be administered in a manner that facilitates adequacy of retirement savings.
The request comes on the back of Rice Warner research commissioned jointly by the SMSF Association and BGL Corporate Solutions that found contributions caps were a critical determining element in allowing individuals to build healthy superannuation balances.
Further, the study uncovered conclusive evidence SMSF members looked to make “catch-up” retirement savings contributions during the latter years of their working lives when they could afford to do so.
“This is an important piece of research that demonstrates the importance of concessional caps to allow people to top up their payments later in their working lives to ensure they are self-sufficient in retirement,” Slattery said.
“Without sufficient contribution caps to allow people to make the necessary contributions to their superannuation, these catch-up contributions will not be made, reducing people’s ability to achieve adequate superannuation savings to rely upon on retirement.
“Any move by the government to reduce concessional contribution caps will undermine people’s ability to build adequate savings to use in retirement, with the inevitable effect of increasing their reliance on the age pension.”
She used the research findings to reiterate the association’s call for the inclusion of carry forward provisions for unused contribution cap amounts.
The Rice Warner study analysed superannuation fund contribution data from 14,000 SMSFs.
