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.