Specialist training should be a mandatory requirement for practitioners providing SMSF advice and its implementation by the Quality of Advice Review (QAR) would be consistent with similar calls by three government agencies, according to the SMSF Association.
As part of its submission to the QAR, the industry body recommended the review enshrine the need for specialist training, which has already been recommended by the Productivity Commission’s 2018 superannuation report, Financial Adviser Standards and Ethics Authority Financial Planners & Advisers Code of Ethics 2019 Guide and Australian Securities and Investments Commission Report 575.
Association chief executive John Maroney said the prior reports and guides have already highlighted that education improves the quality of advice and consumer outcomes and the need to complete appropriate training and ongoing professional development to gain and maintain the education standards.
“We believe requiring advisers to have specialist advice competencies in certain areas is important to lift the professionalism and integrity of the advice industry,” Maroney said.
“Our research shows that 63 per cent of SMSFs were established on the suggestion of an adviser and 81 per cent of SMSFs use some form of adviser, highlighting that the quality of advice can materially affect the retirement savings of most SMSF members.
“If members and trustees do not understand their obligations and the time required to manage an SMSF, this can not only result in severe penalties and sanctions, but a lack of effective engagement and management causing significant financial detriment.”
The association also repeated its call for financial advisers to have access to their clients’ ATO superannuation reports, noting it was a matter of urgency.
“Significant changes to the superannuation law under the Fair and Sustainable Superannuation Reforms came into effect from 1 July 2017. These measures introduced significant complexity to the superannuation system and the provision of superannuation advice. Some five years later, financial advisers are still denied direct access to these crucial reports and information,” the submission stated.
Maroney added the introduction of the concepts of total superannuation balances (TSB) and transfer balance caps (TBC) in 2017 made access to reports a pressing issue for advisers and administrators and the lack of access restricts the ability to provide advice.
“The introduction of multiple TSB thresholds and the pension TBCs have added further complexity to the provision of superannuation advice. This is in addition to the management of individual contribution caps and of different bring-forward and unused contribution cap concessions,” he said.
“The indexation of the TBCs on 1 July 2021 has added further to this complexity, so giving advisers access to the ATO portal is a crucial reform.”
