The limited licensing regime for accountants should be phased out and a new advice framework implemented to better meet the needs of self-managed superannuation fund (SMSF) trustees, according to a pre-Budget submission filed by the SMSF Association.
The reasoning behind the SMSF Association’s approach to limited licensing was made clear by the organisation’s chief executive, John Maroney who claimed that limited licensing was preventing SMSF trustees from getting basic SMSF advice without incurring a significant cost.
“If an SMSF trustee wants to seek advice regarding the establishment of a pension from their accountant, unlicensed accountants are unable to provide this simple advice. Licensed advisers can provide this simple advice, but it involves costly documentation disproportionate to the advice sought,” he claimed.
What is more, Maroney claimed that the desire policy outcomes from introducing limited licensing had not been achieved in circumstances where individuals had unmet needs and advisers faced high regulatory costs and accountants were being strangled by regulation.
“What we’re proposing is a new consumer-centric advice framework with improved SMSF advice a critical element of this project,” he said. “Accordingly, we encourage Government to address the regulatory framework by transitioning the defunct limited licence to a new consumer-centric framework that raises advice standards and rectifies the advice gap to allow appropriately qualified SMSF advisers to provide low-cost, simple advice.”
The SMSF Association submission has also called on the Australian Taxation Office (ATO) to allow a wider range of people particularly financial advisers to access its portal rather than just registered tax agents to access Total Superannuation Balance and Transfer Balance Cap information.
“Ironically, these individuals are generally not able to provide SMSF advice as they are not licensed with ASIC. Incongruously, those licensed advisers who can provide SMSF advice (such as financial advisers) have no reasonable way of sourcing ATO portal information directly from the ATO as they are not, generally, the member’s personal tax agent.
“There is a fundamental lack of information for SMSF advisers who need to provide timely advice based on myriad of complex caps, thresholds and balances. Accountants can get information but cannot provide advice and financial advisers are unable to get information but are the individuals able to provide advice. This jeopardises the quality of advice being provided to members,” he said.