The SMSF Association (SMSFA) has added its support to recommendations made by the Financial Services Council (FSC) for a simplified regulatory framework to deliver better advice to clients.
SMSFA deputy chief executive and policy and education director Peter Burgess said the recently released white paper echoed many of the association’s concerns and was consistent with its own submissions on the topic.
Burgess noted the industry bod had made a submission to the Australian Securities and Investments Commission on its Consultation Paper 332, which examined the provision of affordable advice, and included feedback from SMSFA members that the advice process was lengthy and costly.
“Our priority is for reform that reduces complexity, improves efficiency and drives harmonisation to better enable the provision of affordable, accessible and quality advice to small businesses and consumers,” he said.
“A white paper that proposes reforms that will benefit clients and advisers, deliver cost savings and practical, relevant advice that consumers will understand and engage with gets our full support.
“In particular, we note that the FSC is calling for the need to restrict specialised advice to those who are authorised to provide that advice and that this necessary reform should be enforced through standards.
“The importance of education and specialisation are key components of the association’s core beliefs and we endorse measures that seek to improve standards and recognise the need for specialisation.”
The Association of Financial Advisers (AFA) and The Advisers Association (TAA) also welcomed the white paper and its steps to reduce the cost of advice by simplifying regulations around its provision, echoing support also given by the Financial Planning Association.
AFA general manager Phil Anderson said: “We particularly welcome the recommendation on the removal of the safe harbour steps, the change of a statement of advice to a letter of advice, and the recommendation that financial advice be tax deductible.
“This paper is an important input into Treasury’s 2022 Quality of Advice Review, which is a big opportunity to get to the core of the issues and to find solutions to address the problems.”
TAA chief executive Neil Macdonald said the FSC’s call for the separation of product and advice would represent “a giant leap forward”, resulting in only licensed practitioners being able to provide financial advice.
“We are also pleased to see the call to distinguish between financial advice and general information. This would help consumers better understand when they are being given financial advice and when they are merely being supplied with general information by a product provider,” Macdonald said.
“The blueprint is a sign that we are moving in the right direction. While there is certainly more work to do, with genuine collaboration, and a focus on client and consumer outcomes, we are confident that the financial advice industry has a brighter future.”
