Regulation

The test allows investors who can certify that they earn $250,000 a year or have more than $2.5 million in net assets to access higher-risk securities normally off-limits to individuals. But many say the test is confusing and outdated, and an independent statutory body has called for an update.

Multi-strategy separately managed accounts (SMAs) are “taking off like you wouldn’t believe”, according to SQM Research CEO Louis Christopher, but the rapid increase in their use could also be creating a regulatory blind spot.

While the move to tax superannuation balances above $3 million at a higher rate would affect only a handful of people at first, if the threshold is not indexed to inflation, future generations may be turned off from investing in their super, industry leaders say.

The proposal seeks to preserve this definition of what a superannuation complaint is, but “clarifies the policy intent that other types of superannuation-related complaints may also be under the AFCA scheme”.

Back in 2019, then-FPA CEO Dante De Gori and Tangelo Advice Consulting’s Conrad Travers engaged the ATO to see if it would be open to updating guidance on the tax deductibility of upfront advice fees. By the middle of this year, we should see the outcome.

“There’s so much pain, so much division on this one,” FAAA CEO Sarah Abood said of the proposed exemption. “It actually really upsets me, as I know it upsets many members.”

Consumers will be bamboozled by the government’s plan to divide advisers into “experienced” and “relevant” camps, the association explained. That, and the need for a sunset clause, mean the current proposal needs work.

The regulator has issued 26 stop orders against 18 companies for failing to adequately target financial products to the appropriate market since the “design and distribution obligations” regime began, it said in an initial compliance review. And it warned that closer scrutiny is coming.

The 16,000 advisers providing full-service, holistic advice aren’t the ones who can plug the advice gap, Mota explained. Levy’s plan, however, has the potential to facilitate a “quantum shift” in the industry.

The advice review lead had said she wouldn’t comment on the recommendations while the government pondered its response. But with the consultation dragging on, she urged the government to get it done and let ASIC do the refinement.

While FoFA was the right policy for its era, Ripoll says the industry has come a long way and has different needs. The Quality of Advice Review’s proposals are an “important step” for today’s industry, he believes.

Advisers can practice without a relevant degree for around 30 years according to the draft proposal. They do need a clean record, however – but only up to the end of 2021.