Cutting red tape for financial advice will aid the economic recovery post-COVID-19 pandemic, says self-managed superannuation fund (SMSF) body, the SMSF Association (SMSFA).
The SMSFA said it fully supported the Federal Government’s stated ambition to “grow” Australia out of debt and said cutting red tape that stifled the financial industry should be part of that goal.
John Maroney, SMSFA chief executive, said the organisation urged the Government to prioritise financial advice reform by aiming to make it more accessible and affordable.
“The Government’s measures to help alleviate the economic fallout caused by this pandemic have been necessary, but now is the time to consider how the country is going address a deficit that is the largest as a percentage of GDP since World War II,” Maroney said.
“The financial advice sector will play a crucial role in helping many Australians and businesses recover from this economic crisis, so it's more important than ever that the Government commits to reform.”
Maroney said the economic impact of COVID-19 had highlighted the strains resulting from the system’s costs and inefficiencies, as well as how many people who need financial advice were being excluded.
“The recovery period now provides an opportunity to rethink and design the professional advice framework,” Maroney said.
“This includes the provision of ‘strategic advice’ that is decoupled from products and ‘scaled advice’ that could allow broader access to advice for consumers about how to structure their financial affairs.
“This is critical because consumers find that advice comes in an ‘all or nothing’ package, demonstrated by the fact temporary relief was required just to ensure someone simply wanting advice on taking money out of super under the COVID-19 relief measures did not have to pay for a comprehensive Statement of Advice that is both time consuming and costly.”
Earlier this week, the Actuaries Institute said a regulatory framework was needed for financial advice for retirees in the price range of $200 to $300.
Comments
What’s stopping their members from offering strategy only advice? I don’t recall reading in any regulatory guides where it says you must recommend a product to issue an SoA or charge for your time... I daresay they are trying to get a carveout to get around the current advice process. Hot tip - poor strategic advice can be just as, if not more, damaging than poor product advice.
I agree with these comments, but at the same time I think its a ploy for accountants to get a carve-out from regulation which doesn't help anything. Simplify the regulations, and address the licensing, but no carve-outs.
A corrupt and inept government looking to cut regulations that protect every Australian to help further enrich their wealthy mates (and ultimately themselves). And the financial planners trying to ride along on their coattails even though regulation of financial advice is so far removed from anything that will rebuild the economy back to anything like 'normal'. It makes me sick.
Hey Mark. In your mental fog of ignorant outrage I think you may have ended up on the wrong website. Try www.smh.com.au for the sort of contrived content that will pander to your biases and prejudices.
No biases, prejudice or outrage. The current federal government demonstrates its corruption and ineptitude regularly.
Can you enunciate the mechanism through which deregulating the provision of financial advice will "aid the economic recovery post-COVID-19 pandemic"?
I will employ an extra 2 staff and help an extra 200 Australians per year get out of the hand to mouth cycle instead of spending 80% of my time checking boxes and joining dots as well as completing theoretical assignments for subjects I've already done when I've got actual clients that need my time and are prepared to pay for help
Burn! Spot on Slippery Slope.
It's time to get rid of the SOA altogether. Isn't the whole point of meeting the FASEA requirements, passing the exam, adhering to the code or ethics and the best interest duty, to make it a profession? What other profession has to produce an SOA-like document? none. Once FASEA qualified you should be able to do your research, file note it all and then present your advice to the client in whatever form you like, verbally if you want. In most advice presentation meetings the SOA is barely even opened and then never taken home by the client and read.
We need to get to the point that a client can come in and seek advice about a single issue and get it then and there. You charge for you time and move on. If it's complex then you go through the same process you do now but without the SOA at the end of it. If they need further advice in the future, then you just give it, no ROA rubbish that you don't even need to give to them. Make a file note, invoice the client, move on.
This seems sensible. I have never been to a financial planner/adviser but have reviewed SOAs for a few close friends and relatives. They are mostly boilerplate and seem to have had very little tailoring to the individual's circumstances (and this is not necessarily a criticism - if the SOAs weren't cookie cutter templates, many people could not afford to see an adviser). Much better to dispense with this charade/waste of time and make a real profession out of the sector and just provide the advice sought.
"What other profession has to produce an SOA-like document?"
Following the Institute of Actuaries of Australia's professional standards requires in many cases voluminous reports which no one reads when all the customer is interested in is the one page conclusion/executive summary.
actually, I don't think we have enough rules in financial planning.
ASIC, please review the opt-in requirement. shouldn't we be getting client consent every month? let's do that let's all sit around and send clients opt-in notice each month.
ASIC, I hope you are reading my posts. please enact a new rule where all financial planners just sit around emailing clients' consent forms.
please make it monthly (and mandatory), and please appeal the wagyu and shiraz case. let's go to the high court. please seek special leave
thank you,
fan of ASIC (we don't have enough rules in fp)
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