TheInvestment and Financial Services Association(IFSA) has backed theFinancial Planning Association’s (FPA) recent comments in defending the Financial Services Reform Act (FSRA) against a push by accountants to change aspects of the licensing regime.
IFSA chief executive Richard Gilbert has further backed the FPA’s stance by urging the Government to “resist attempts to persuade it to provide ‘carve-outs’ for accountants from certain FSR licensing requirements”.
According to Gilbert, the Senate Corporations and Financial Services Committee has accepted the arguments of sections of the accounting profession that they should not have to be licensed under FSR to provide advice in the area of self managed superannuation funds (SMSF).
FPA chief executive Ken Breakspear has also again slammed the proposal of the committee specifying when a person is regarded as not providing a financial service, saying “the proposal to move back to the old ‘incidental advice’ provision is backward”.
IFSA and the FPA say with no accounting body policing advice by accountants on SMSFs, this advice would be outside the new licensing system and may see consumers lose the right to access independent resolution schemes, as well as compensation.
IFSA is also in support of theAustralian Securities and Investments Commission’s (ASIC) recently released guidelines on the use of past performance in investment advertisements.
Under ASIC’s ruling, the use of past performance figures in advertising must now include a five year return figure, be calculated after the deduction of ongoing fees and not make use of simulated figures.
The regulator also says past performance figures should be up to date, not given undue prominence in advertising and balanced with information outlining the risks of investing within the product.
IFSA, who was in consultation with ASIC on the development of the guidelines, says the issues raised in the guidelines also include the promotion of comparability, simplicity and transparency of fund performance figures.
The rulings are the result of a lengthy process which began in January last year after a number of complaints about the use of past performance information.
