Limited licensing has failed claims SMSF Association

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.

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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.

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The leadership of this association is delusional as ALL financial planners would like to have the ability to give "low-cost, simple advice" when needed. What makes these fools more special than the rest of us???? BTW, there is nothing "simple" about SMSF structures as I have had to assist clients to clean up the trail of destruction created by some well-meaning (read seriously conflicted and/or unqualified) accountants who put people into SMSFs in inappropriate situations (e.g. low balances, low financially literacy, very limited diversification, etc.).

Some reasonable points from SMSF Association but they are not unique to SMSF advice. "Costly documentation disproportionate to the advice sought" is a problem with all licensed advice. It pushes consumers away from licensed advice into unregulated products and strategies like property speculation, cryptocurrency, and the myriad of online scams.

SMSFs should not be given an exemption so that they can join the unregulated ranks. There are already far too many SMSFs. They should be reined in rather than encouraged to proliferate through regulatory carve out.

The real issue is chronic over regulation of licensed advice. The government needs to fix this problem across the board rather than giving selective carve outs.

Agree Limited licensing has failed. The costs to get and maintain a limited license are exhorbitant and the time ( FASEA study & CPD) invested means that it is not worth it. Now the ASIC levy is projected to go up 26% as well. The only ones making big profits out of this are the dealer groups in this space.

Dealer groups don't make big profits anymore either Gavin. The big profits are made by dodgy, unregulated product providers. They have lower cost structures through no regulation, and plenty of clients thanks to ASIC pushing consumers away from regulated advice.

At long last, someone admits that the Limited AFSL regime is a total failure, exorbitantly expensive and in my view poorly managed by the regulators.

the ATO should definitely allow financial advisers to access the portal for clients. I participated in a discussion with the ATO and suggested this. there are lots of information gaps advisers could fill as most clients are not aware of their tax positions

it's not just the limited license that needs an overhaul, the entire afsl regime needs to be rethought from the consumers perspective, it is way too complex with layers after layers of duplication

consumers want timely, cost-effective advice, under the current framework, this cannot be achieved.

I have totally moved to service HNW clients only but it's not the rich and wealthy who need access to financial advice, it's the people who are at the bottom of the economic spectrum who need it most.

Yes, Mr Maroney, lets allow accountants to give unfetted SMSF advice without going into the appropriateness of that advice. Clearly all the rules and obligations required by the law on financial planners in providing advice on a financial product shouldn't apply to accountants,... or should they ?
I know of some accountants under the previous arrangement which you'd like to see returned, set up an SMSF without even putting together an appropriate Investment Strategy document. Sounds like a great idea to expose a client to a potential 49.0% tax liability on a client if the ATO ever audits the fund as non complying !
If you think for one minute, this doesn't happen, I'm convinced it happens more often and not because most accountants are only part timers in the SMSF space and related financial advice arena, such as, insurance & investment.
This is a case of what's good enough for the goose is good enough for the gander !
Welcome to our world,.... that of the financial adviser !

Well ……. Welcome to our world !! The world of over regulation (by too many authorities), too much red tape and too much paperwork which all contributes to making strategic advice too expensive for the 'average' Australian. Sorry, but I have seen far to many people coerced into SMSF's when they shouldn't have been. Again, 10% spoil it for the 90% who are doing the right thing.

All businesses (read advisers) need to compete on a level playing field. Make it uneven, and the Australian Competition & Consumer Commission would have every right to step in. One in, all in.

SMSF Assoc was originally set up for accountants,and continues in the same vein.

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