In its 2020-21 budget submission, the association argued that the current overarching regulatory framework regulating professionals who deal with SMSFs is complicated, inefficient and able to be worked around.
SMSF Association chief executive John Maroney said limited licensing prevents SMSF trustees from getting basic SMSF advice without incurring a significant cost.
As a result, he called on the government to transition the “defunct” limited licence to a new consumer-centric framework that raises advice standards and rectifies the advice gap to allow appropriately qualified SMSF advisers to provide low-cost, simple advice.
“If an SMSF trustee wants to seek advice regarding the establishment of a pension from their accountant, unlicensed accountants are unable to provide this simple advice. Licensed advisers can provide this simple advice, but it involves costly documentation disproportionate to the advice sought,” Mr Maroney said.
“The desired policy outcomes from introducing limited licensing have not been achieved. Individuals have unmet needs, advisers face high regulatory costs and accountants are strangled by regulation.
“What we’re proposing is a new consumer-centric advice framework with improved SMSF advice a critical element of this project.
“The ultimate goal is to advocate for reform that reduces complexity, improves efficiency and drives harmonisation to better enable the provision of affordable, accessible and quality advice to business and consumers.”
The SMSF Association also requested in its submission for the Australian Taxation Office to allow greater access to its portal.
Further, the association proposed a spousal rollover, increased contribution flexibility and simplifying superannuation complexity around thresholds, residency rules, death benefits and legacy pensions.
Mr Maroney said that, currently, only registered tax agents are able to access its portal to get total superannuation balance (TSB) and transfer balance cap (TBC) information that is crucial for SMSF advice.
“Ironically, these individuals are generally not able to provide SMSF advice as they are not licensed with ASIC. Incongruously, those licensed advisers who can provide SMSF advice (such as financial advisers) have no reasonable way of sourcing ATO portal information directly from the ATO as they are not, generally, the member’s personal tax agent,” Mr Maroney said.
“There is a fundamental lack of information for SMSF advisers who need to provide timely advice based on myriad of complex caps, thresholds and balances. Accountants can get information but cannot provide advice and financial advisers are unable to get information but are the individuals able to provide advice. This jeopardises the quality of advice being provided to members.
“The move to open data and increased access to the ATO portal is an essential next step for the $750 billion SMSF industry and the only means by which the sector can institute commercially viable operational surveillance to the standard the ATO rightly requires, and we encourage the government to make this an ATO priority project.”
I’ll offer a suggestion too while we are at it. Ban all SMSF’s, they are nothing but a rort for accountants. I want “control”, please spare me. Back to your tax returns you lot
nah, let’s leave things the way they are.
i like the mess it is right now. suits me just fine. for me it’s a regulatory monopoly, i have a fasea approved degree, and passed the exam, and plenty of money. so thank you asic, legislators and dealer group compliance for making it so difficult for everybody else. reduces all my competition
it doesn’t make any sense, but the game works for my personal benefit. I am gonna clean up big time and they don’t know what a gift this is to me. they won’t figure it out for a long time. if you were smart you wouldn’t work for the government. only stupid people work there. i could give you a thousand examples.
with all the advisers gone, all accountants out of the way, i’ll be the only one left. ha ha gift.
thank you, muah, xoxo
your secret is out. everyone knows now, https://www.afr.com/companies/financial-services/the-national-scandal-that-is-financial-planning-20200109-p53q0z
even the mainstream media have picked this up now. but, i agree with you, it will be 10 to 15 years, once it hits catastrophic levels before this is addressed by the dumbest people running the show. they don’t read newspapers.
until then, enjoy your good luck, and good fortune my friend.
Last year 3,612 licensed advisers left the profession, and 33 joined. Encouraging numbers for those of us who will be left!
yeah, 50% already had a fasea approved degree
Unfortunately we have come across situations like the one described by Reality and I certainly don’t want to go back to the days when there is no advice document to make it feasible to complain about the advice that the adviser usually unlicensed and non qualified has given. However, I agree that if the advice is to an existing client and a current full up to date Fact Finder is on file and there is no change in administration systems/product and no change to the amount ie we are dealing with one super account going to a Allocated Pension in the existing Platform then there should be a simpler option to give advice.
Such as a Record of Advice that states that the Super account is going to Allocated Pension and as a result there is:
No increase in the ongoing costs.
Centrelink has been considered and the consequences explained if applicable.
Estate planning matters such as the Binding / Non-binding nomination in the super is being retained or altered to a reversionary
A summary of the responsibilities to hold a compliant Allocated Pension and the benefits.
A simpler document for all that meet these conditions not just a carve out for SMSF. No one wants to see the numerous instances of poor advice return but I agree we do need to be able to be able to deliver ongoing advice in a more affordable manner for all, not just industry funds that can hide behind general advice regardless of the consequences of their advice to the consumer.
Just a mess.. welcome to beaureacrat central
The same argument could be used for every other bit of financial planning advice. The problem is not SMSF’s and if anything they have less of an issue than mums and dads with small super balances as an SMSF is generally more complicated that the mum and dad’s who have been priced out of receiving advice. Letting unlicensed accountants provide advice on the back of an envelope is not the answer – neither is doing everything on a client directed basis.
The FASEA standard is the new bare minimum standard. There should be no carve outs from the bare minimum standard.
Pension advice can be simple but also it can be complex. This just sounds like someone crying for a carve out to provide unqualified advice.
Yeah…. There’s a reason it works like this.
Literally this week I saw a ‘limited license’ adviser mess with someone’s pensions, resulting in a consolidation of pensions within their SMSF, which completely ruined the quarantined tax-free component for death benefit purposes which is going to cost the client’s estate thousands upon death and they lost centrelink grandfathering for the income test which is also going to cost them thousands as their balance reduces in years ahead.
If you want to provide financial advice, it shouldn’t be ”limited”. Every bit of advice you give effects other aspects of a client’s situation. ‘Starting a pension’ can be a lot more complicated than it sounds if you do it properly.
Why don’t the SMSF Assoc, work with AFA, FPA etc, to lobby this. We all want the same thing, but trying to get a carve out wont work.
90% of consumers cannot afford advice. If you have below $750,000 of investable assets , the cost to the adviser in time,ongoing education is similar , so as a percentage of the asset must rise to accommodate. How can a 35 year old who needs advice pay $7,500 per annum if all they have is $50,000 as a starting investment ?
There are other options out there Garry then spending $7,500 per annum. Does a 35 year old need to see their financial planner every single year? or can a plan be put in motion for 3-5 years, monitored electronically and the client brought in for a face to face meeting only in a major event?
And why does advice (and the value of that advice) need to be tied to investable assets?
Lol you do realise that doesn’t fly anymore right? You have to produce and advice document EVERY SINGLE TIME or ASIC assume no work was done. Even if you made 100 phone calls.
exactly. Chris is the type of adviser ASIC is targeting to ban. highly qualified, know it all. 2 masters degrees eh. i don’t know why people post using their actual names. just looking for trouble. look at what happened to mcgoo, he just couldn’t shut up he knew it all didn’t he. now he is telling his tales at the local rsl to deaf servicemen who just nod and wink at his “stories”.
if you want to join terry at black rock rsl be my guest otherwise, get back to your 200 page SoA.
when henry kissinger did his ph.d thesis at harvard, it was 300 pages, since then a Ph.D thesis is kind of expected to be less than 300 pages.
my stupid SoA’s are 150 pages each thanks to the stupid’s at dealer group none of whom have a clue. take that Kissinger.
yes, let’s ban Chris. he doesn’t do any work and is lazy.
yeah, let’s get him.
Chris, if this is the way you operate then you are not compliant. You cannot operate like this anymore !?
Where do you get $7,500 from.
It is pretty easy to structure your offering to deliver value that clients want for well under $7,500. A 35 year old with $50k doesn’t need much more than set them on the right path and come back for a review in 2-3 years (or as needed if big life events happen).
Correct, and in that case you just charge when the client comes in and requires more advice, rather than slapping on an ongoing fee and offering the client SFA.
ADHOC advice is fine for clients who don’t need high touch service. The reason it doesn’t happen more is that it isn’t as lucrative to the adviser, but that’s where we are at now.
The Whole Financial Advice process needs to be reworked to reduce the masses of BS Red Tap STRANGULATION !!!!! Not just the SMSF space. You can’t just reduce SMSF red tape and leave the rest of Advice completely stuffed, it won’t work like that.
So true, how about 13 page ROA’s now
Usual commercial pragmatic approach from John.
Why can’t the government get these sort of people on board instead of the bureaucrats building empires for their own purposes?
Keep up the lobbying John.
Maybe someone will listen eventually?
Agree. Good sense here from this professional in a boiling sea of self serving, knuckle dragging simians.
sounds a lot like a carve out to me.
One rule for some….one rule for others.
Self interest groups pushing for leniency yet again.