While the government’s initial response to the Quality of Advice Review (QAR) recommendations has been welcomed by the financial advice sector, the proposals fail to address the role of accountants in providing advice, according to the Institute of Financial Professionals Australia (IFPA).
IFPA head of superannuation and financial Services Natasha Panagis said while the government’s acceptance of 14 recommendations would reduce the red tape involved in the provision of advice, none of the QAR recommendations considered the advice accountants could provide and the limited Australian financial services licensing regime.
Panagis added this should be addressed given Australian Prudential Regulation Authority-regulated superannuation funds will soon be able to provide retirement advice.
“As trusted, qualified and experienced professionals, accountants play a vital role in assisting their clients with their financial arrangements,” she said.
“We would like to see accountants be able to fill the advice gap, particularly if superannuation funds will be given the opportunity to provide advice to their members.
“Accountants have the expertise and are just as competent as other providers to give advice to their clients.”
She said the government’s acceptance of a recommendation to allow superannuation funds to provide advice to members will need more work to ensure fund members are protected and the advice provided is in the best interests of members.
“It is also crucial to carefully consider how members will be charged for advice received, particularly if collective charging will be amended to allow superannuation funds to provide more retirement advice and information to their members,” she said.
“This may lead to some individual members being charged for advice that they may not receive.
“We also remain cautious about stream three of the reforms, which looks at new business models and allowing other institutions, such as banks and insurers, to provide personal advice.
“We are pleased that this stream of work will be subjected to further consultation with industry and relevant stakeholders before it is finalised.”