SPAA is pleased the Government is considering scaled advice to replace the accountants’ exemption but disappointed risk commissions have been dealt with separately inside and outside of super.
The Self Managed Super Fund Professionals’ Association (SPAA) has today welcomed the announcement of the detail of the Federal Government’s Future of Financial Advice (FOFA) reforms which seek to improve the quality of financial advice for Australians, but has expressed concern about some measures which may prompt inappropriate selling practices or increase costs for investors.
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“The FoFA reforms represent an important step forward in improving quality of advice outcomes for all Australians,” said Andrea Slattery, CEO of SPAA.
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“Like all investors, Australians who manage their own retirement savings in self managed super funds stand to benefit from the initiatives the Government announced today.” The reforms follow extensive consultation with industry which SPAA has been involved in.
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“SPAA is particularly pleased the Government will consider a restricted (scaled) advice licence for accountants, previously exempted from the licensed regime, who advise self managed super fund investors as we have worked hard to progress this issue with the Government. This recognises that accountants who advise on self managed funds may not wish to provide recommendations to clients to purchase specific financial products. We look forward to working with them on the detail, particularly on the minimum competencies required to hold such a licence,” Mrs Slattery said.
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SPAA has pushed for scaled (limited) advice to be made available across the superannuation and financial services industry and is pleased that a level playing field is being created for this to occur.
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“SPAA is also pleased that the Government is considering revocation of the ASIC class order which currently allows infra fund advice in superannuation. We look forward to being involved in consultations on the potential extension of intra fund advice to transition to retirement pensions, Centrelink entitlements and retirement planning generally,” she said.
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“SPAA has strongly advocated the introduction of a prescribed statutory duty for advisers to act in the best interests of clients. We are pleased the Government has heeded our call that such a duty should be scalable to the clients’ needs and instructions. SPAA patron, the Hon Sir Anthony Mason, agrees it is imperative that any legislation has regard to the client’s instructions when providing advice in the best interests of the client. SPAA will be keenly involved in further discussions in the consultation process,” Mrs Slattery said.
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Mrs Slattery said SPAA is supportive of the ban on conflicted remuneration, including commissions and soft dollar benefits. However, SPAA is pleased to see that professional development activities will not fall under the ban on soft dollar benefits. This will lift standards of education of financial advisers.
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“However, SPAA is very concerned that the commission ban on insurance products which only applies in superannuation, may distort the market and encourage mis-selling practices by opportunistic intermediaries,” she said.
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SPAA is also disappointed that the Government has chosen to nominate an ‘opt in’ arrangement where clients must nominate to renew their relationship with their adviser every two years.
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“SPAA does not believe an opt-in arrangement is required for financial advice in SMSFs and believes the Government should wait to see what effect the banning of commissions and volume payment changes have on the market before considering the introduction of these measures,” Mrs Slattery said.
“The FoFA reforms represent an important step forward in improving quality of advice outcomes for all Australians,” said Andrea Slattery, CEO of SPAA.
x
“Like all investors, Australians who manage their own retirement savings in self managed super funds stand to benefit from the initiatives the Government announced today.” The reforms follow extensive consultation with industry which SPAA has been involved in.
x
“SPAA is particularly pleased the Government will consider a restricted (scaled) advice licence for accountants, previously exempted from the licensed regime, who advise self managed super fund investors as we have worked hard to progress this issue with the Government. This recognises that accountants who advise on self managed funds may not wish to provide recommendations to clients to purchase specific financial products. We look forward to working with them on the detail, particularly on the minimum competencies required to hold such a licence,” Mrs Slattery said.
x
SPAA has pushed for scaled (limited) advice to be made available across the superannuation and financial services industry and is pleased that a level playing field is being created for this to occur.
x
“SPAA is also pleased that the Government is considering revocation of the ASIC class order which currently allows infra fund advice in superannuation. We look forward to being involved in consultations on the potential extension of intra fund advice to transition to retirement pensions, Centrelink entitlements and retirement planning generally,” she said.
x
“SPAA has strongly advocated the introduction of a prescribed statutory duty for advisers to act in the best interests of clients. We are pleased the Government has heeded our call that such a duty should be scalable to the clients’ needs and instructions. SPAA patron, the Hon Sir Anthony Mason, agrees it is imperative that any legislation has regard to the client’s instructions when providing advice in the best interests of the client. SPAA will be keenly involved in further discussions in the consultation process,” Mrs Slattery said.
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Mrs Slattery said SPAA is supportive of the ban on conflicted remuneration, including commissions and soft dollar benefits. However, SPAA is pleased to see that professional development activities will not fall under the ban on soft dollar benefits. This will lift standards of education of financial advisers.
x
“However, SPAA is very concerned that the commission ban on insurance products which only applies in superannuation, may distort the market and encourage mis-selling practices by opportunistic intermediaries,” she said.
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SPAA is also disappointed that the Government has chosen to nominate an ‘opt in’ arrangement where clients must nominate to renew their relationship with their adviser every two years.
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“SPAA does not believe an opt-in arrangement is required for financial advice in SMSFs and believes the Government should wait to see what effect the banning of commissions and volume payment changes have on the market before considering the introduction of these measures,” Mrs Slattery said.