Details revealed for proposed strategic advisory model

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In response to section 4.6 of the advice quality review discussion paper, CA ANZ, the Institute of Chartered Accountants and the SMSF Association have prepared a joint submission outlining a new model for strategic advice on retirement.

The submission noted that due to escalating licensing costs, ongoing compliance costs and unintended consequences of the FASEA regime, most of the estimated 1,600 members of major accountancy bodies and the SMSFA who are authorized to providing limited advice have ceased to do so.

For many accountants, the brief indicated that retirement advice was only a small part of their business and that it was simply no longer viable for practitioners to provide it.

“Consumers need access to affordable strategic retirement advice that can be delivered through an effective and efficient model, using highly trained professionals and with adequate consumer protections” , he explained.

In the memorandum, the professional organizations presented a proposal for a solution consisting in modifying the definition of a tax agent service in article 90-5 of the Tax Agent Services Act 2009 (TASA).

Under the proposal, qualified accountants who operate under a public certificate of practice and who are registered tax agents could provide simple strategic pension advice when they are either:

  • Registered in the register of relevant suppliers on the date of adoption of the legislation or within two years
  • Accredited as an SMSF Specialist Advisor by CA ANZ or the SMSF Association
  • Meet all SMSF Specialist accreditation requirements specified by the Tax Practitioners Board

Practitioners who meet these criteria would be able to provide advice in the following areas:

  • Calculate and make a payment of any contribution to an existing Superannuation Fund or SMSF
  • Establishment of a pension and calculation of payments under a pension payable by an existing pension fund or an SMSF
  • Creation of an SMSF
  • Liquidation of an SMSF

The SMSF association and accountancy bodies have stressed that they are not seeking a return to the old accountant exemption whereby any qualified accountant could advise on pension and SMSF matters without additional training or consumer protection.

“This proposal could be accomplished either by inclusion in legislation, in TASA, or by regulation, in TASR, or by way of legislative instrument, the submission states.

“While a legislative instrument is the quickest method, inclusion in primary legislation would provide the most certainty. We would also be happy to consult with you further on the most appropriate method of promulgation.

The SMSF Association and accountancy bodies have urged both the Quality of Advice Review and the new Labor government to urgently consider its recommendations.

“We request that suitably qualified professional accountants with additional requirements be able to provide advice in specific limited areas of superannuation without the need for an AFSL, in order to meet the considerable existing need for advice to consumers,” the brief states.

In a separate submission to the quality of advice review, a group of accountancy bodies, financial planning associations and consumer groups, called the Joint Associations Task Force, highlighted the need for an approach more consumer-focused regulation with reduced costs and greater recognition of professional judgment.

The submission explained that the current regulatory requirements are confusing, complex and overwhelming and do not meet customer needs.

He called for documentation requirements for consumer advice to be reviewed to ensure advice is meaningful and can be understood by the individual consumer.

It also recommended a move towards a principles-based regulatory regime that is more consumer-focused, based on the recommendations of the Quality of Advice Review and the results of the ALRC review, and which is linked to the need for professionals to be able to respond and provide advice tailored to the different needs of consumers and clients.

Details revealed for proposed strategic advisory model

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Last update: June 21, 2022

Posted: June 22, 2022

Miranda Brownlee

Miranda Brownlee

AUTHOR

Miranda Brownlee is the Deputy Editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF industry.

Since joining the team in 2014, Miranda has been responsible for breaking some of Australia’s biggest superannuation stories and has reported extensively on technical strategy and legislative updates.
Miranda also has extensive experience in business and financial services reporting, having written for titles such as Investor Daily, ifa and Accountants Daily.

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