White Paper on modernising financial advice hits the right note

From

Peter Burgess

The SMSF Association welcomes the Financial Services Council’s White Paper on Financial Advice, saying it aligns with its goals of modernising financial advice and enhancing the professionalisation of the advice sector.

SMSFA Association Deputy CEO/Director of Policy & Education Peter Burgess says the White Paper, which was underpinned by analysis by KPMG, very much reflected what the Association said in its submission to ASIC on its Consultation Paper 332 – Promoting Access to Affordable Advice for Consumers.

“In that submission we noted feedback from our members that the advice process is lengthy and costly. Our priority is for reform that reduces complexity, improves efficiency and drives harmonisation to better enable the provision of affordable, accessible and quality advice to small businesses and consumers.

“So, a White Paper that proposes reforms that will benefit clients and advisers, deliver cost savings and practical, relevant advice that consumers will understand and engage with gets our full support.

“In particular, we note that the FSC is calling for the need to restrict specialised advice to those who are authorised to provide that advice, and that this necessary reform should be enforced through standards.

“The importance of education and specialisation are key components of the Association’s core beliefs, and we endorse measures that seek to improve standards and recognise the need for specialisation.

“In our ASIC submission we said that advisers who provide advice to individuals about SMSFs should have specific SMSF education and qualifications that underpin their advice. The Productivity Commission in their final report (Superannuation: Assessing Efficiency and Competitiveness) recommended that SMSF advisers should have a form of specialised qualification to provide SMSF advice.

“This was also supported in ASIC’s Report 575 where the regulator suggested that SMSF advice would be improved by raising education standards with a specific SMSF qualification for advice providers wishing to provide SMSF advice.”

Burgess says that the FSC’s justified assertion that the “financial advice industry has reached an important milestone – it has become a profession” should be a clarion call for the industry to call for the modernisation of the complex and costly regulatory framework it is enmeshed in.

“This is where the KPMG analysis is so pertinent, highlighting why the changes the industry is advocating for will reduce the cost of advice and open it up to more consumers.”

The Association thanks the FSC for the opportunity to consult and work with them on these important issues. “Our ongoing work with the Government, regulators and stakeholders on essential reforms to financial advice continues as we look forward to the detailed Government review into financial advice due in 2022,” he says.

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