‘Dodgy adviser’ comments a threat to advice profession: Expert

Aaron Dunn, chief executive of Smarter SMSF, said in the latest SMSF Adviser podcast, the recent furore from the advice sector over comments made by Misha Schubert, CEO of the Super Members Council (SMC), suggests there is still a lot of misconception over the definition of professional advisers and their role within the superannuation sector.

“If we look at the Quality of Advice reform measures and the fact that we’re trying to move financial advice into a profession as such, as well as the fact that we’ve had legislated terminology, like financial adviser and financial planner, comments like those made by Ms Schubert [about ‘dodgy advisers’] can very quickly do damage to the amount of goodwill and work that gets done to build a profession,” Dunn said.

“I think that’s why we saw very firm views get put out very quickly from the FAAA and the SMSF Association making it abundantly clear that if we’re trying to get measures here that are designed to improve access to advice, and whether that access to advice is to a self-managed super fund, or through a financial adviser who is licensed, so an AFSL holder, whether it’s through an industry or APRA-regulated fund, we want to make sure that we are improving access to and the quality of advice that people get.”

Dunn suggested that the comments implied wrongdoing by SMSFs, hinting that they might be used to transfer money out of super funds and engage in activities that could potentially grant unauthorised access to money.

“[People convincing SMSF trustees to illegally access funds] are not using the terms financial adviser so they don’t get caught in the definition that sits within the Corporations Act. They are unscrupulous, and are basically fraudulent, and therefore, should receive the full force of the law,” he said.

“[These comments] are a timely reminder to make sure that if we’re going to have arguments about certain aspects of the industry, we should try and actually collaborate on this stuff together to make a difference, because it’s certainly not helping when you’re trying to build professional standards, and this certainly doesn’t help as we’re going through this period of further consultation and then implementation.”

Dunn continued that the SMSF sector, in light of the illegal early access statistics from the Australian Taxation Office (ATO), is fully supportive of the regulator’s increasing scrutiny and the tightening of regulations to prevent fraudulent activity.

“There is a role that professionals play, there’s a role that the regulator plays, but I always go back to a conversation I had with Jeremy Cooper who chaired the super system review in 2009–10 where he told me he went around the world and looked at different retirement systems, and how he couldn’t understand how you could give the chequebook over to mum and dad to basically run a self-managed super fund by themselves,” Dunn said.

“Other countries like the UK and Singapore were flabbergasted [by this concept] but [we know] it works, and it works because it increases the level of engagement with people and gives them a greater focus on their retirement.”

After her comments were met with substantial opposition from the advice community, SMC issued a statement, attributed to Schubert, in which she is quoted as saying that she “deeply values the role of high-quality qualified financial advisers”, particularly as it pertains to the role they play in providing advice that is in the “best interests of super fund members”.

“Disappointingly, some comments I made in a media release earlier this week highlighting ASIC’s recent concerns about a small subset of operators using cold-calling and online click bait tactics to pressure Australians into moving their super into underperforming products have been mischaracterised,” Schubert said.

“The remarks were not intended to be generalised to all financial advisers.

“I regret – and apologise for – any offence that the mischaracterisation of my remarks caused to reputable financial advisers who are working faithfully in the best interests of their clients.”