Simplifying regulations within the financial advice industry will help Australia’s recovery from the economic impact of the COVID-19 pandemic, the SMSF Association has said.
The association said the temporary compliance relief measures provided by the Australian Securities and Investments Commission (ASIC) during the COVID-19 pandemic had highlighted the effectiveness of a simplified regulatory approach to financial advice and it urged the federal government to consider a system of less complex regulations for practitioners as part of its coronavirus economic recovery plan.
SMSF Association chief executive John Maroney said: “We support the government’s intention to stimulate growth and believe simplifying the regulatory framework around the financial advice industry can play an important role in this process.
“We therefore urge the government to prioritise financial advice reform by aiming to make it more accessible and affordable.
“The financial advice sector will play a crucial role in helping many Australians and businesses recover from this economic crisis, so it’s more important than ever that the government commits to reform.”
Citing recent feedback from association members, Maroney noted many advice practitioners were of the view the relaxed compliance measures provided by ASIC as a result of the COVID-19 pandemic, including the ability to issue a record of advice instead of a statement of advice when providing financial advice on early access to superannuation, were a “step in the right direction” for the industry.
“The reality is professionals have little room to move when asked to advise on a specific issue, illustrating just how many barriers they confront in providing efficient and affordable advice,” he added.
“They have to contend with complex regulatory frameworks, with multiple regulatory regimes and regulators. Advice software and costs of compliance are substantial, and professional indemnity insurance is not only expensive, but becoming harder to obtain.”
In April, Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume welcomed the temporary relief measures announced by ASIC.
In February, Alexis Compliance and Risk Solutions principal Christina Kalantzis said the continuous change to SMSF advice compliance had reached an almost unmanageable level for advisers.