The SMSF Association has argued that ASIC’s reputation and the fact that large licensees prioritise revenue generation makes it difficult to roll out affordable advice.
In its submission to ASIC’s consultation on promoting access to affordable advice for consumers, the SMSF Association has warned that big licensees are “creating a significant extra layer of compliance and cost”.
“It appears that some AFSLs impart a layer of compliance that prioritises their own self-interests rather than the provision of advice with a consumer focus. It can be argued that some AFSLs have a bias towards revenue generation and ensure that their compliance guidance attracts the least number of complaints,” the association said in its submission.
“AFSLs also seem to have a very risk averse attitude due to the potential consequences they face from ASIC from a breach of regulation. This has forced AFSLs to create an additional burdensome layer of compliance to mitigate their risk.”
The association also reported additional feedback that self-licensed advisers and those with links to small AFSLs experienced “less friction” and were able to provide the advice consumers requested “in a more affordable and efficient fashion”.
The association also outlined a host of other barriers to providing affordable advice, including compliance costs and levies and a lack of clarity on how scoped advice can be provided, as well as ASIC’s ‘image’.
“ASIC’s role as the ‘corporate cop’ tends to intimidate the advice industry despite the fact both advisers and ASIC seek to achieve the same goal, to ensure consumers receive compliant and affordable advice,” the association said.
“The Australian Tax Office (ATO) ongoing consultative relationship with the SMSF and tax industry has in fact strengthened their compliance regime due to their willingness to consult openly with industry and this helps achieve improved compliance and efficiency for SMSF investors and professionals.”
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