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(March-2004) Govt criticised on SMSF advice decision
The financial planning community and the Self-Managed Super Funds Professionals’ Association (SMSFPA) have lashed out at a decision by the Federal Government to grant accountants the right to provide at least limited advice on self-managed super by providing relief from the Financial Services Reform Act (FSRA).
The relief, announced by the Treasurer Peter Costello allows “recognised accountants” to provide advice to their clients on the decision to acquire or dispose of an interest in a self-managed super fund.
According to Costello, the new regulation is intended to promote certainty for accountants and “acknowledges the important role that accountants currently play in providing a range of professional advice and expertise to their business and other clients”.
“It ensures that advice on the establishment of an SMSF, which often forms a part of overall business arrangements, is treated comparably with other FSRA exempt advice provided to a client, such as business structuring and taxation,” he says.
The Treasurer’s announcement has been welcomed by CPA Australia which described it as an excellent outcome for the accounting profession.
CPA Australia CEO Greg Larsen says his organisation has lobbied hard with the government over the past 18 months to have the legislation changed.
“We’ve always said that if accountants are not providing advice about a particular super fund or particular investments, then that advice does not constitute financial product advice and should not require an Australian Financial Services Licence under FSRA,” he says.
“This is a win for accountants and a bonus for the general public. They can continue to consult their accountant on super structures without the complexities of seeing two professional advisers,” Larsen says.
However, Financial Planning Association CEO Kerri Kelly says the Treasurer’s decision is of concern because it represents an unravelling of FSRA even before its official start date.
“The relief from FSRA for accountants appears to be an unnecessary further complication of super, creating uncertainty in an area which already requires a great deal of specialist knowledge,” she says.
The SMSFPA has also been harshly critical of the Government’s move arguing that they will not assist in the development of higher industry standards.
“These changes do nothing to protect the consumer from incompetent or poorly skilled advisers,” SPAA CEO, Andrea Slattery says.
“The lack of skills in this highly complex area has already been highlighted by the regulators as requiring a significant upgrade and to this end SPAA supports the Australian Taxation Office and Australian Securities and Investments Commission initiatives,” she says.
“Suffice to say that this carve-out for accountants not only places a greater compliance burden upon trustees of funds, but also on the regulator because of the many problems already evident in cases where clients have received untrained advice,” Slattery says.
The move has also been criticised by the Australian Labor Party with Federal Opposition Financial Services Spokesman Senator Stephen Conroy claiming the Government is more concerned about appeasing accountants in an election year than with the protection of consumer interests.
AUTHOR
Mike Taylor
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