Financial Planning, Superannuation

New ROAs put onus on clients

early access advice

Template record of advice documents from five professional bodies have made it clear early access advice will be limited and at the request of consumers.

Five professional associations representing financial advisers and accountants have released two record of advice (ROA) templates for the provision of advice related to early access of super during the coronavirus pandemic and which require consumers to self-declare they are eligible for the payment.

The template ROAs were developed by Chartered Accountants Australia and New Zealand, the SMSF Association (SMSFA), CPA Australia, the Institute of Public Accountants and the Financial Planning Association for the use of their members and were released by all five bodies today.

The associations were recently involved in the development of temporary provisions that would allow financial advisers to use an ROA instead of a statement of advice and for accountants and tax agents to use an ROA without needing to hold an Australian financial services licence.

The two templates cover advice provided by a licensed financial planner or adviser and that provided by a registered tax agent (RTA), with the SMSFA saying an ROA must be provided to clients under the regulatory relief measures announced by ASIC on 14 April.

“Over the past months, the professional bodies came together and collectively worked with ASIC to help ensure there are more skilled advisers in the marketplace to address community demand and the release of these templates today is the next step in our continued support for the Australian community,” the SMSFA stated when releasing the ROAs to its members.

“The decision to access superannuation early is significant and it is important that any individual considering this option has the opportunity to access important advice from their choice of adviser, which is why these bodies have made these templates available to all RTAs and financial advisers.”

It added that two template ROAs had been developed in recognition of the different obligations and legislative frameworks that apply to financial planners and advisers, and to RTAs.

Advice providers were encouraged to ensure the template was appropriate for their client’s needs, and were instructed they could tailor the layout and formatting as well as the information relating to a client’s specific needs and circumstances, but they must retain critical information that must be included by law.

Use of the templates, however, was restricted to the members of the five professional bodies, according to a disclaimer contained within the templates, and any use without amendment or adaption must also include an attribution of copyright to the bodies, while it should be removed where adaptations and amendments were made to the document.

In regards to the provision of advice, the template indicated the ROA would not cover all aspects of a client’s financial situation and “advice covered by this document is limited to your request for advice on the early release of superannuation for persons affected by COVID-19”.

Additionally, the template placed the onus on those seeking advice that they were eligible for early access to superannuation by stating: “You have told us that your employment has been impacted by COVID-19, resulting in you meeting the government’s criteria to access up to $10,000 of your superannuation in the 2019/2020 financial year and/or 2020/2021 financial year.”

The template added: “Specifically, you have told us that you were [either]: made redundant since 1 January 2020/had your work hours reduced by 20 per cent or more since 1 January 2020/are receiving an eligible social security benefit.”

While both template ROAs covered whether someone should seek early access, the amount they should access, and the impact on tax, insurance and the future balance of superannuation, the financial adviser ROA provided greater levels of information on these areas compared to that prepared for RTAs.

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