The decision last week by the Treasury Department to provide an exemption to accountants in the area of advice on self-managed superannuation funds (SMSF) reignited the debate about who could give advice under the Financial Services Reform Act (FSRA).
From the outset it was clear that the FSRA was about reform of the financial services and advice industry – not just in the area of planning but also in property, real estate and accounting.
The Federal Treasurer has stated the exemption to accountants does not cover the provision of advice about investments within an SMSF, which will still remain subject to FSRA licensing.
Rather, the exemption allows accountants to make recommendations regarding acquisition or disposal of a superannuation product in relation to an SMSF.
To make it clearer, one of the accountancy bodies stated their members will be able to set up SMSFs for clients who have decided they want one, identify the broad asset allocation, audit the funds, provide compliance advice about the obligations of a trustee of an SMSF and manage the tax returns related to the fund.
It may sound a little cynical, but doesn’t that count as financial services advice? And while it doesn’t deal with the underlying dollars, it does touch upon the big picture advice issues relating to an SMSF.
It is little wonder then that financial planners and the Financial Planning Association, as well as Labor’s financial services spokesperson, Stephen Conroy, are saying the move is inconsistent with the whole thrust of the FSRA.
Such actions by a planner would generate the need for a statement of advice, a product disclosure statement and a financial services guide.
It is important to remember the ability of accountants versus planners regarding SMSFs is not the issue at stake, but rather the nature of the FSRA and the consistent application of it across all those who give financial advice.
Financial planners must be getting frustrated with having to deal with the whole compliance burden and switch to the FSRA regime, while accountants, real estate agents and property seminar gurus all seem to have escaped the noose.
Many planners will be referring back to comments made last year by Parliamentary Secretary to the Treasurer Senator Ross Cameron, which best sums up the issue and should become a rallying point.
“Accountants should be able to act on instructions to create SMSF structures and they should be able to advise on the tax consequences of an SMSF, but it remains that the Act treats an SMSF the same as any other product and structure and it requires a licence to recommend them.”