The Australian Securities and Investments Commission (ASIC) has flagged industry views that the regulations enabling access to affordable advice do not work in the favour of consumers.
ASIC commissioner Danielle Press told the virtual SMSF Association (SMSFA) National Conference 2021 today the regulator has received 480 submissions in response to its Consultation Paper 332, which focused on the impediments to the provision of affordable advice, with the majority of respondents being financial advisers and accountants.
“We are engaging with industry about the practical steps that we can take to promote about the availability of good-quality and affordable advice for consumers and we are conducting research into the cost of advice,” Press said.
“In that respect, I would like to take the time to thank the SMSFA for actually taking the time to encourage their members to respond to us so that we can take a better-informed position on where your priorities lie, and we would also like to thank the SMSF Association for providing its own submission.
“We know the association has commented in its submission that the process is too lengthy, too costly and it prioritises compliance and the needs of the licensee over the consumer. This is broadly consistent with some of the general themes that we are seeing emerging from the other submissions that we have reviewed to date.”
She also highlighted ASIC remains supportive of the SMSF sector, noting that while it did not regulate funds, it was directly responsible for those who provided SMSF-related advice.
“ASIC recognises that SMSFs are an important part of the investment sector, representing nearly 26 per cent of assets held with over 591,000 SMSFs in the market,” she said.
“From an ASIC perspective we are very supportive of the SMSF sector as an investment vehicle where they are appropriate for consumers.
“To achieve a healthy and sound sector, consumers need to be able to make confident and informed decisions about setting up and managing an SMSF and that management is based on good, appropriate and accurate advice and information.
“The provision of misleading information about SMSFs undermines the sector and limits the ability of Australian consumers to make confident and informed choices. In that respect, ASIC continues to be ready to take action where we identify information that is misleading about SMSFs being provided to consumers.”
She added ASIC had set up an unlicensed advice working group within the organisation during 2020 following concerns about the possibility of unlicensed advice targeting consumers during the pandemic and the regulator encouraged the reporting of any unlicensed activity.
During the conference, the ATO and Australian Financial Complaints Authority (AFCA) also noted the good work being conducted by the SMSF sector and its advice practitioners, with tax commissioner Chris Jordan praising the high level of compliance among SMSFs and AFCA lead ombudsman Natalie Cameron noting the low level of complaints related to SMSF advice.
