financial advice, SMSFA

Adviser references need specificity

Licensed advisers SMSF Association Unlicensed operators Advisers

A call has been made for financial services stakeholders to properly acknowledge the difference between licensed advisers and illegal operators.

The SMSF Association has made an appeal for the financial services industry to make a conscious effort to properly delineate licensed advisers from bad actors operating within the wider community.

The call comes in the wake references made by Super Members Council chief executive Misha Schubert to unlicensed practitioners as “dodgy financial advisers”, a comment for which she has since apologised.

“As we all know only too well, no one suffers more than financial advisers when terms such as ‘dodgy financial advisers’ get thrown around. Particularly when the term financial adviser is incorrectly applied, as it so often is,” SMSF Association chief executive Peter Burgess stated in his latest blog post.

“The Corporations Act 2001 section 923C restricts the use of the term ‘financial adviser’ and ‘financial planner’ to those who are a relevant provider (also known as a licensed financial adviser). Yet time and time again, these terms are quickly applied and interchangeably used in the context of unlicensed operators.

“The conflating of licensed advisers and unlicensed operators is one of the biggest challenges facing the financial advice profession. The reputational damage it causes, along with the perpetuation of various myths, cut deep.

“Today, the advice industry thrives on having the highest standards – a testament to the hard work and commitment of the advisers that remain. They have no truck with those doing the wrong thing, and for the very small percentage that do, there are legislated processes and penalties.”

To this end, Burgess suggested it was time for all financial advice stakeholders to take a stand against unlicensed operators to protect the reputations of licensed advisers and prevent the harm caused to consumers.

He also took the opportunity to acknowledge the leadership role the SMSF sector has provided in the financial advice community and recommended other parts of the industry learn from what the space has already been able to achieve.

“For years, it’s been the SMSF sector that has led the way with retirement income strategies. With about 50 per cent of SMSF members in retirement, it’s an issue our superannuation sector has successfully addressed – in no small part due to their advisers,” he said.

“Not so the APRA (Australian Prudential Regulation Authority)-regulated funds. They have been in accumulation mode and are only now coming to grips with policies that address the needs of their growing cohort of members nearing or in retirement.

“It seems to your association that these funds have something to learn from our sector in terms of how to address members’ retirement income needs. After all, we do have the same goal of giving every Australian a dignified and secure retirement, so it is time that we worked together to achieve the best possible outcomes for everyone.”

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