The SMSF Association and industry bodies must work together to formulate a new licensing framework for advice practitioners within the context of the large unmet advice gap, an industry executive has said.
During the recent SMSF Association “Accountants and SMSFs – what lies ahead?” roundtable, OpenInvest co-founder and chief executive Andrew Varlamos said he believes there is a solution that will help advisers, accountants and SMSF trustees.
“It requires cooperation between the industry bodies to come up with a recommended framework to [bring to] government, in a post-royal commission environment in which the big institutions are withdrawing, to solve what is a public policy failure,” Varlamos said, referring to the current licensing regime.
“Otherwise if it’s not solved, it will become a public policy debacle.”
He referred to the SMSF Association’s “SMSF Investor Insights: Discussing key myths surrounding SMSFs” report, based on Investment Trends data, published last week.
“It’s just a bizarre scenario that there are hundreds and thousands of SMSFs saying they have unmet advice needs and are not receiving the advice – advice more broadly, in terms of guidance and professional assistance – that they would like,” he noted.
“The even more bizarre thing is that hundreds and thousands of SMSFs are saying this year after year.
“So it actually is a policy failing. If the policy guidelines lead to a situation where people are not getting their needs met and it puts them in, frankly, a risky position where their whole of wealth is not being looked after, then it’s a policy failing.”
It was crucial for all parts of the industry, covering accounting, financial advice and the SMSF Association, to closely examine what role they play to ensure the best outcomes can be provided to SMSFs, given the existing licensing regime, he said.
“It’s important to take a step back and question what might be better ways to refine elements of the licensing regime so that hundreds and thousands of people actually get their needs met in a safe way that ensures their outcomes are best looked after,” he noted.
“That’s a useful discussion to have and I think there are things that can be done.”
The roundtable concluded the association’s inaugural SMSF Week last week.