Cut 'stifling' advice red tape to aid recovery

While measures taken by ASIC earlier in the year to simplify financial advice were a step in the right direction, advice needs to be more available and affordable if the government wants Australia’s economy to grow, said SMSF Association chief executive John Maroney.

“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,” Mr Maroney said.

He believed the recovery period provided an opportunity to “rethink and design” the professional advice framework, including the provision of “strategic advice” that is decoupled from products and “scaled advice” that would allow broader access to advice for consumers on 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,” Mr Maroney said.

“The reality is professionals have little room to move when asked to advise on a specific issue, illustrating just how many barriers they confront in providing efficient and affordable advice.”

Red tape is also leading to a lack of information for advisers who need to provide advice based on “myriad complex caps, thresholds and balances”.

“Registered tax agents are able to get information from ATO portals but cannot provide superannuation advice, while financial (tax) advisers are unable to get information yet are the advisers authorised to provide advice,” Mr Maroney said.

“This jeopardises the quality and efficiency of advice that is being provided.”