The SMSF Association has used its supplementary budget submission for 2020/21 to call on the federal government to reform and simplify the financial advice regulatory framework.
The association stated a less complex approach to regulating the financial advice industry would enable the provision of more affordable and accessible advice and ultimately aid Australia’s economic recovery following the COVID-19 pandemic.
SMSF Association chief executive John Maroney said: “We support the federal government’s stated ambition to grow the Australian economy out of debt in the wake of the COVID-19-induced recession – and cutting the red tape that is stifling the financial advice sector for consumers and advisers should be integral to this goal.”
As part of its submission, the industry body highlighted key areas, in addition to that of the financial advice framework, that would benefit from a more simplified approach, including providing financial advisers access to superannuation tax portals, streamlining total super balance thresholds and improving superannuation residency rules for SMSFs.
“We believe finding a solution to the issue about how SMSF and superannuation advice and services fit into the financial advice regulatory framework for accountants, financial advisers and superannuation trustees is an important and necessary first step,” Maroney noted.
The association also pointed to the complexity of the limited licence framework and called for it to be removed so the industry could move towards a consumer-centric framework that would allow for the provision of more single-issue or scaled advice.
“Currently, SMSF trustees who wish to seek simple SMSF advice are either required to seek formal costly financial advice from a licensed financial adviser or must act without advice. This means there are important unmet SMSF advice needs in the market,” Maroney said.
“An individual who seeks superannuation and retirement advice, whether it be from a financial adviser, accountant or superannuation trustee, should receive high-quality and affordable advice with the same meaningful disclosure.
“In our opinion, providing a new overarching regulatory framework for superannuation financial advice is key to this process.”
Last month, the association said the temporary compliance relief measures provided by the Australian Securities and Investments Commission during the COVID-19 pandemic had highlighted the effectiveness of a simplified regulatory approach to financial advice.
