The SMSF Association is arguing that providing advice with respect to self-managed superannuation funds (SMSFs) is probably beyond the scope of any review of the Tax Practitioners Board (TPB).
The SMSF Association chief executive, John Maroney said that while the current independent review of the effectiveness of the TPB provided an opportunity to identify some of the impediments in the regulatory advice system preventing SMSF trustees from getting basic SMSF advice, the issue needed to be examined in a larger forum.
“…we believe that to get the right regulatory structure for SMSFs is probably a task beyond this Review, and that it requires a broader inquiry that obtains input from the Australian Securities and Investments Commission (ASIC), Financial Adviser Standards and Ethics Authority (FASEA), professional bodies and consumers,” Maroney said.
“We strongly advise that the Review make a recommendation recognising this issue of SMSF regulation and that Government seeks to address the issues relating to SMSF advice at an overarching level as soon as possible.”
Maroney said the SMSF Association’s submission to the TPB Review was neither advocating a return to the accountants’ exemption nor proposing a solution at the present time.
“However, we are firm in our conviction that any solution must work for both Tax Agents and Tax Financial Advisers (TFAs).
“From our perspective, the issue that needs resolving is how basic SMSF services fit into the entire financial sector regulatory framework for accountants and financial advisers.
“Essentially, the outcome should improve consumer protection, ensure unscrupulous advice is prohibited and allow consumers to receive basic SMSF advice efficiently.”
Maroney said that under the current regulatory system, SMSF trustees who wanted basic SMSF advice were either required to seek formal financial advice from a licensed adviser or make decisions without advice, adding that if SMSF trustees were unwilling to pay for the cost of formal advice, there would be important unmet SMSF advice needs in the market.
“Furthermore, the ASIC exemptions available to accountants are complex, unclear and do not provide protection to consumers for whom an SMSF is inappropriate or those seeking simple advice,” he said.
“In addition, licensed advisers who provide the same service that an accountant provides, via an ASIC exemption, are required to document this through costly statements of advice.”
“From our perspective, the outcomes from introducing limited licensing have not achieved their policy intent. Individuals have unmet needs, advisers face high regulatory costs and accountants are strangled by regulation.”