In its submission to the ASIC consultation on affordable advice, The Advisers Association (TAA), which represents Australia’s largest institutional adviser group, said improving current ASIC guidance around scaled advice would not be enough to incentivise most advisers and licensees to get on board with delivering low-cost advice.
“Improving the guidelines will not address the underlying issues as to why licensees and advisers do not provide limited advice, which fundamentally relates to the risk of getting it wrong,” the association said.
TAA suggested ASIC establish an adviser unit to provide rulings to licensees that could clarify how the rules applied in practice, similar to the binding rulings provided by the ATO to accountants.
“This would help to clarify expectations related to advice legislation and regulatory requirements that are subjective and increasingly complex,” the association said.
The association said that the broad-based wording of the FASEA code of ethics was also contributing to licensee fears that advisers could be subject to retrospective action for providing limited advice.
“The concerns of not meeting FASEA and BID obligations (Standards 5 and 6) is compounded by a genuine fear of some future look-back program and/or AFCA complaint resulting in a broader review of the appropriateness of that advice with a potential binding finding against the adviser/licensee,” TAA said.
“Unless something changes the cost benefit trade-off of providing limited advice is just too highly weighted against the adviser.”
TAA added that the SOA relief provided around early super access advice during COVID-19, which ASIC has conceded were not popular with advisers, had been of minimal benefit due to the plethora of other obligations governing personal advice.
“The changes put financial advisers on an uneven playing field compared with other providers, such as intra-fund advice and accountants, due to the need for financial advisers to meet all the advice requirements including best interest and safe harbour obligations for new clients,” the association said.
“It is important for there to be a level playing field for advice, so if a client wants to see a financial adviser for the same advice about their super, the adviser should be subject to the same rules and disclosure requirements as if the advice was provided by a super fund through intra-fund advice.”
Hallelujah, bring it on.
Level playing field is what is needed indeed! Bring it on.
Not the dumbest idea I have heard in a long time.
A Level playing field of Advice from ASIC who support anything and everything for Industry Super.
TELL HIM HE’S DREAMING !!!!!!!!!!!!!!!!
Absolutely spot on!! As a CPA accountant I constantly seek rulings from the ATO. Yes and Yes, this will improve advice, especially scaled advise!!!! I’m emailing this to my local member right now – Mr Scott Morrison! Well done TAA!!! This will definitely improve the technical competency, professionalism and regulatory compliance! We should organise a petition and have this submitted to parliament( my political past has resurfaced).
At last. A body who gets it.
Couldn’t believe the SMSF CEO’s opinion on scaled advice, believing licensee policies endeavoured to stop client complaints and produce revenue – dah. Seems like a sensible thing to do.
Lets hope the powers that be value the TAA more than the SMSF dude.
Thank you TAA. I agree with all points you have made and support your submission.
Makes sense can I join TAA or do I have to be an AMP adviser?
Another reason why I quit the FPA who are useless.
This is probably the most concise and accurate summary of the current situation.