The Financial Services and Credit Panel (FSCP) believed the individual contravened sections 961B(1), 961G and 921E(3), specifically they did not demonstrate compliance with the Code of Ethics’ value of diligence and Standard 5.
In its determination, the panel said the relevant provider gave advice in June 2022 recommending a client make a superannuation non-concessional contribution of $110,000 for FY2021–22 and $301,681 (total) for FY22–23.
When giving the advice, the relevant provider failed to take into account that as at 5 May 2022, the client was in year two of a three-year “bring-forward arrangement” and her remaining balance (of the NCC cap) was $124.65.
As a result of following the advice, the client was notified by the Australian Taxation Office (ATO) on 30 November 2022, that she made an excess NCC of $109,775.35 in 2021–22. In addition, the client was notified by the ATO on 19 November 2023, that she needed to withdraw $312,301.21 from her superannuation and that her 2022–23 income tax assessment would be amended to include her associated earnings amount of $39,174.
Alternatively, her excess NCC would be taxed at 47 per cent and the ATO would send her an excess NCC tax assessment for $131,131.55.
Under the written direction, the individual must engage an independent person with financial services compliance expertise, provide their details to ASIC and have the individual audit their next 10 pieces of advice that include a recommendation in relation to superannuation contribution or recontribution that are designed to take advantage of certain tax and super provisions to maximise tax benefits.
The auditor must notify the adviser of any changes to the advice in writing and the individual must enact these. If their AFS licensee disagrees with the recommended changes, they must keep a record detailing why they withhold approval and tell the auditor of those reasons.
The auditor must then submit a report to ASIC within 30 days of completing the final audit.
I wonder what will happen when the new class of super fund advisers (I mean FUM retention officers) provide NCC advice to super fund members. It’s “simple” advice isnt it and part of the proposed remit?
Oh I know the super fund trustees will get access to the ATO portal contribution data…derrr
This is not an ATO portal access problem. It is an adviser-incompetence problem.
(still, we advisers should have access to the ATO portal)
Why did the client not mention they previously exercised the bring forward rule? The client obviously knew about it.
How come when ART did this to one of my clients, and I had to spend hours and hours fixing it, nothing ever came of it…? unlicensed advice via their call centre..?
If only some common sense erupted, and financial advisers were given access to the ATO portal where this information resides. Advisers still need to go through a rigorous process to determine NCC positon, but this would make one big step in the process a whole lot easier.
But of course, financial advisers are not professional enough to be trusted with such a thing!!!!
“the individual must engage an independent person with financial services compliance expertise, provide their details to ASIC and have the individual audit their next 10 pieces of advice…”
So why do we need AFSL system?
It’s time we eliminated the $120,000 pa Non-Concessional cap altogether & just work on a lifetime contribution cap. ie put in whatever you can afford, until you get to the lifetime cap. Much simpler & far more equitable.
Plus advisers should be able to access the Cap Records when approved by their clients.
Brilliantist ever superannuation idea. Bravo
(SSA adviser, here)
More reason to allow advisers access to client’s Super Caps as shown on the ATO. This is a farce.
Reprimand is too lenient. These muppets are costing the rest of us.
What was the client loss here?
Would it not be best for the ATO to allow financial advisers the ability to check with the ATO on what contributions have been received in the past.
Accountants can do this, why cant Advisors have the same access??
Dear FSCP & ATO, ever thought that financial advisers might need access to the ATO contributions data for clients ? Plus TSP, TBC, etc.
Do you think that may help stop these problems ?
Should the ATO / Govt be held to any account for designing a system that does not allow Financial Advisers to access critical ATO Super Data. At the same time the ATO gives access to this Super data to Accountants that are mostly NOT qualified to give Super Advice.
Canberra is truly a clown show. Or is this an intended impediment to Advisers.
It’s almost as if we should get access to the ATO tax portal to get rid of these errors. Can only dream.
Imagine if the adviser had ready access to the client super contribution records available from the ATO portal……..all of this would likely have been avoided.
well if the adviser had access to an ato portal might not have been an issue… never the less should have been checked but just saying give access to ato portal make advisers jobs easier
Unfortunately the super funds don’t update the ATO regularly or reliably enough anyway
No wonder why Advisers are leaving in droves. This stuff should be handled at Licensee level rather than advisers being dragged through the mud for errors that are easily remediated directly with the client. This is total overreach. If we don’t start winding back this madness, the industry will remain paralysed.
It would be great to advise the FSCP that we could do our job a little better if we had bloody access to the ATO information!!