The Financial Planning Association (FPA) and the Investment and Financial Services Association (IFSA) have moved to thwart further bids by accountants to get a larger carve-out on superannuation under the Financial Services Reform Act (FSRA).
The two associations have entered a series of submissions to the Joint Parliamentary Committee on Corporations and Financial Services (JPC) arguing against accountants being given additional exemptions to advise on a wider range of superannuation funds.
IFSA chief executive Richard Gilbert has stated in the association’s submission that it is “opposed to the granting of broad exclusions from fundamental aspects of the FSR consumer protection regime” if they relate to advice and superannuation.
He also says that all advice providers should be licensed and further carve-outs would damage the FSR’s consumer protection regime. He adds, given the recent carve-out on self-managed superannuation funds (SMSFs) and the growth of these funds, “further exemption for accountants would not, in our view, be in keeping with the policy objective of regulating the provision of retail product advice under FSRA”.
Gilbert’s comments also received support from FPA chief executive Kerrie Kelly who wrote that while the administration, establishment, structuring and compliance on SMSFs may be exempted from the FSR regime, further exemptions surrounding superannuation advice should be “strictly limited to the type of structure recommended”.
Kelly also requested accountants be required to be members of an independent complaints handling scheme as required by FSR, provide disclosure regarding the limitations of their advice, and be subject to the necessary specialist education requirements to advise on SMSFs.
The issue of accountants being able to give advice on a wider range of superannuation vehicles was first raised by the committee in a series of hearings in June last year, after which it recommended a wider carve-out for accountants.
It was reignited in early March when submissions were received for a range of matters relating to financial services, including accountants being permitted to give superannuation structure advice.
The Institute of Chartered Accountants, CPA Australia and the National Institute of Accountants argued in a joint submission that with the carve-out and creation of regulation 7.1.29a by the Federal Treasurer Peter Costello, they should be able to give wider superannuation structure advice as recommended by the committee in 2003.
CPAA financial planning policy adviser Catherine Crack says the three bodies are seeking a clarification on the recent exemption regarding self-managed superannuation funds, which they believe should extend across a wider range of superannuation fund structures.
“This is not a deviation on what the accountants have received in the recent exemption but a confirmation on what we have always sought,” she says.
