The independent Review into the effectiveness of the Tax Practitioners Board (TPB) provides an opportunity to identify some of the impediments in the regulatory advice system that prevents SMSF trustees from getting basic SMSF advice.
SMSF Association CEO John Maroney says: “However, we believe that to get the right regulatory structure for SMSFs is probably a task beyond this Review, and that it requires a broader inquiry that obtains input from the Australian Securities and Investments Commission (ASIC), Financial Adviser Standards and Ethics Authority (FASEA), professional bodies and consumers.
“We strongly advise that the Review make a recommendation recognising this issue of SMSF regulation and that Government seeks to address the issues relating to SMSF advice at an overarching level as soon as possible.”
Maroney says in the Association’s submission to the TPB Review, we are not advocating a return to the accountants’ exemption. Nor are we proposing a solution at the present time, recognising it’s a complex issue that this Review will help shed some light on.
“However, we are firm in our conviction that any solution must work for both Tax Agents and Tax Financial Advisers (TFAs).
“From our perspective, the issue that needs resolving is how basic SMSF services fit into the entire financial sector regulatory framework for accountants and financial advisers.
“Essentially, the outcome should improve consumer protection, ensure unscrupulous advice is prohibited and allow consumers to receive basic SMSF advice efficiently.”
Maroney says that under the current regulatory system, SMSF trustees who want basic SMSF advice are either required to seek formal financial advice from a licensed adviser or make decisions without advice. If SMSF trustees are unwilling to pay for the cost of formal advice, there will be important unmet SMSF advice needs in the market.
“Furthermore, the ASIC exemptions available to accountants are complex, unclear and do not provide protection to consumers for whom an SMSF is inappropriate or those seeking simple advice.
“In addition, licensed advisers who provide the same service that an accountant provides, via an ASIC exemption, are required to document this through costly statements of advice.
“From our perspective, the outcomes from introducing limited licensing have not achieved their policy intent. Individuals have unmet needs, advisers face high regulatory costs and accountants are strangled by regulation.”