Speaking at a Pritchitt Partners event in Sydney on Thursday, SMSF Association chief executive John Maroney said as the financial advice industry moved away from a product-centred approach, it made sense to reexamine the licensing framework around this and move towards a system that would provide more value for SMSF trustees.
“Our view is where simple advice is required, where strategic advice is required, that it doesn’t involve the sale of a product — if it’s the sale of a product it probably fits neatly under the financial product advice,” Mr Maroney said.
“I support the idea that we should be moving to a system that focuses on financial advice; it shouldn’t be part of a product distribution paradigm, and that will take a while to get to because we’ve had financial product advice from the regulator’s point of view for decades, and from the industry’s point of view that has been a big part of how revenue generation works, but we need to move away from that.”
He added that the association aimed to do away with statements of advice for SMSF clients who were looking for assistance with administrative aspects of their fund that did not involve product recommendations.
“In the SMSF area, things like we believe starting a pension should not require a statement of advice, that is something accountants should be able to deal with without going through a formal financial advice stage,” Mr Maroney said.
“Giving people advice that it’s a good idea to contribute to super in general without specifying a particular fund shouldn’t require financial product advice, that should be something that is part of tax and strategic advice.”
He said that the SMSFA, in consultation with the other major accounting and advice industry bodies, was “still working on” a detailed model to take to government and was conscious of retaining a level playing field between the two professions.
“We’re talking to [the] other associations to come up with something that isn’t just for accountants and isn’t just for our members; it’s something that applies across the board,” Mr Maroney said.
“There should be a way of helping those Australians; however, they are saving for retirement or needing investment advice or risk advice, that they should be able to get help and support and guidance before you get into full financial advice.”