The SMSF Association (SMSFA) will support a move to principles-based advice as proposed by the Quality of Advice Review (QAR), but has suggested accountants be given a greater role in the provision of limited advice.
As part of its response to a consultation paper released in late August, the SMSFA stated it supported the removal of the duplication of best interest obligations and the move to a principles-based approach, but noted the adoption of an obligation to provide good advice needed clarification.
“What is considered to be ‘good advice’ is subjective and risks being applied differently in retrospect,” it stated in its submission.
“The policy intent will need to be clearly defined. It should align with the Financial Planners and Advisers Code of Ethics 2019 and conflicts with the code should be avoided.
“Otherwise, there is a real risk that over time, the administrative burden that has manifested around the application of the current best interests duty may arise. Timely, practical guidance on its application will be crucial.”
Addressing the issue of what could be done to better facilitate the provision of limited advice, it noted accountants could step into that role as most were unlikely to seek to become licensed financial advisers under the current education standards.
Additionally, it said while the limited licensing regime was now obsolete, most accountants did not want to provide financial product advice.
“Rather, they wish to provide advice that is within the realms of what many clients expect to be in the ordinary course of a tax agent service,” it said.
“With the declining number of financial advisers and the unmet advice needs in the community, accountants have a valuable role to play.”
It said suitably qualified accountants should be able to provide certain limited advice that did not involve recommendations to acquire financial products.
“For example, accountants should be able to provide simple advice on superannuation contributions that extends beyond the provision of factual information and how a type of contribution is treated for income tax purposes from the perspective of the party making the contribution and/or the super fund receiving it,” it said.