The proposed limited licence allowing accountants to advise on SMSFs, replacing the accountants’ exemption, could effectively exempt them from considering whether a client is better off in an SMSF.
This is the concern of Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos, who in a submission to Treasury said there are already an increasing number of people approaching the Financial Ombudsman Service and other legal services because they believe they have been inappropriately moved into an SMSF.
“In ASFA’s view, an authorisation limited to SMSFs may mean that there is no obligation on the accountant to assess whether or not a person is better off in an SMSF compared to their current fund or product as they do not have the authorisation to give advice on other products,” she wrote.
Ms Vamos also said the timing to apply for a licence should be “shortened substantially” to a one-year transition, with a minimum of two rather than three years (which would allow accountants to continue to operate under the existing exemption until 1 July 2016).
The pooled superannuation industry and many financial services providers have had significantly shorter deadlines implementing Stronger Super and Future of Financial Advice reforms, which are new laws and much more complicated to implement.
Because the accountants’ exemption is based on existing law, one year should be sufficient, Ms Vamos argued.
ASFA also strongly urged the Australian Securities and Investments Commission to issue regulatory guidance in relation to the provision of advice on SMSFs, including disclosure of risks, such as investment risk, or risks related to personal circumstances, such as marriage breakdown.
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