Accountants ‘overlooked’ in QAR: SMSF Association

In response to the discussion paper on the retirement phase of superannuation, the SMSFA said that with changes to the financial advice profession’s significantly reducing number of advisers, it is concerned about how the profession will service all Australians in need of advice.

“We have an emerging advice gap, with many advisers limiting the number of clients they advise. Only clients with certain characteristics will fit their business model. This means that many individuals who were previously advised may no longer have access to an adviser,” the SMSFA said.

“To bridge that gap, the Quality of Advice Review recommended the introduction of a limited advice model for fund trustees. The objective being the enhanced servicing of, and advice given to APRA superannuation fund members.

“This has however created a divide, as those in the middle will unlikely be able to access quality professional advice. This is a significant issue for unadvised SMSF trustees.”

According to the submission, accountants play an important role in advising SMSF members and need an “urgent, legislative solution” to do so.

“Accountants have been overlooked by the Quality of Advice Review, despite being in scope. As a result, they have not been considered in the proposed package of reforms from government,” the SMSFA said.

The submission added: “A legislative solution is needed to remedy the legislative misalignment between the provision of accounting and tax agent services, and financial advice. There is also a need for a fit-for- purpose licensing regime for qualified accountants.

“The limited licensing model is a dying model. It is not fit for purpose and most accountants, regardless of their qualifications, are unable to enter the advice regime due to the operation of the professional year.”

Appropriately qualified accountants, the SMSFA said, can help to fill the advice gap that exists between financial advisers and the proposed advice regime that will apply to APRA-regulated superannuation funds.

“This vital middle ground has been overlooked throughout the Quality of Advice Review, and financial advice reform agenda that has followed,” the submission said.

“This is despite the recommendations of the James Review, and the progress of other James Review recommendations through the government’s current policy agenda.

“We therefore encourage government to escalate this issue and include it as a policy priority.”

The SMSFA argued that, given many clients looking to access “quality financial advice” are inhibited from doing so due to the cost, there needs to be an expansion of the role of accountants.

“Not all clients who wish to seek financial advice will have access to a licensed financial adviser,” the submission said.

“Accountants can play a valuable role in improving financial literacy and often have a deep knowledge of their clients’ finances and family circumstances. They also have a vital role to play in addressing crucial structuring and tax-related matters.

“The grey line that exists between what constitutes the provision of a tax agent service and financial advice therefore needs urgent remediation.”