A senior advice expert has revealed the Australian Securities and Investments Commission (ASIC) is intending to undertake a project to examine what general financial advice entails.
“I don’t know when that’s actually going to be, but they are going to look into the whole concept of general advice,” Chartered Accountants Australia and New Zealand (CAANZ) financial advice leader Bronny Speed said at the SMSF Association Sydney Local Community Christmas lunch last week.
Speed noted what constitutes general advice is currently confusing, covering a significant number of concepts, and that was raised during a recent meeting with Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume.
“When we met with the minister the point was made that there’s general advice, there’s personal advice, there’s factual information, there’s execution-only advice, there is advice as an accountant under [ATO] INFO (information sheet) 216, there’s strategic advice, but to the client they don’t really care. They just want you to give advice,” she said.
“But we’ve got to know how it all works. So the point was made that if we could perhaps simplify the whole system, it might be a good idea.
“So there is a very strong understanding that there are just too many options for us all to comply with easily and we need a simpler model.”
To this end, she said the decision of the five professional bodies – CAANZ, Institute of Public Accountants, SMSF Association, CPA Australia and Financial Planning Association – to work together to formulate a better financial advice structure in conjunction with the government would assist this process.
The message to Canberra, in a similar vein to that regarding the multiple facets of general advice, was to alleviate the numerous obligations advisers have to satisfy to operate legally. According to Speed, this involves the situation of having to deal with several regulatory bodies, paying multiple registration fees and complying with more than one code of ethics.