Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
SMSF specialist training should be ‘set in stone’: SMSF Association
The peak body for those advising self-managed super funds, the SMSF Association, has called for a higher education requirement for the sector. In its submission to the Quality of Advice Review, the group called on the regulator to implement changes highlighted in the prior reports done by the Productivity Commission, FASEA and ASIC, which suggest that additional training should be required for those advising on specialist areas.
Quoting data that suggests about 63 per cent of SMSFs were established on the suggestion of an adviser, the Association believe sit is important that those advising the 1.1 million Australians who are trustees have confidence in the knowledge base of those supporting them. Commenting on the proposal, SMAF Association CEO John Maroney said, “we believe requiring advisers to have specialist advice competencies in certain areas is important to lift the professionalism and integrity of the advice industry.”
The SMSF Association’s submission extended into the sharing of data, with the body recommending that financial advisers have access to essential client ATO superannuation reports. “Since the introduction of the concepts of Total Superannuation Balances and Transfer Balance Caps on 1 July 2017, advisers and administrators have needed access to crucial ATO client superannuation reports” Maroney explained.
This issue has been exacerbated by the fact that there are now multiple Total Superannuation Balance thresholds to deal with in addition to individual contribution caps and bring forward rules. This is a “crucial” reform that would assist advisers in streamlining the provision of superannuation advice.
The group also suggests a “comprehensive review” of the sophisticated and wholesale investor regime is required, and should be prioritised, suggesting that “using this regime for the sole purpose of minimising the compliance burden” was not appropriate. Going further, the submission saw this as a “significant red flag” and potential “canary in the coal mine” for the industry. “The level of a person’s wealth is not an indicator of their financial literacy, sophistication, or skill,” it says.
Other key submissions that differ from the remainder of the industry include the conclusion that the limited licensing framework for accountants “has failed,” with the resultant issue creating a regulatory burden for both licensed and unlicensed accountants that is overly difficult to deal with.
