To improve education and professionalism of the self-managed superannuation fund advice sector the SMSF Association has recommended SMSF advice professionals complete specialist education in its submission to the Quality of Advice Review.
The association stated this would be in line with similar recommendations from the Productivity Commission 2018 Superannuation report, the FASEA code of ethics guide and ASIC Report 575 ‘SMSFs: Improving the quality of advice and member experiences’.
SMSF Association chief executive John Maroney said all these reports highlighted that education improves the quality of advice and consumer outcomes.
“As such, an approved course or accreditation must be completed and appropriate ongoing professional development maintained to retain that certification or accreditation,” he said in a media release. “We believe requiring advisers to have specialist advice competencies in certain areas is important to lift the professionalism and integrity of the advice industry.”
Maroney said professionalisation of the sector must be duly recognised and they should be able to apply their professional judgement in line with other professions.
“This involves recognising the various industry participants operating in the financial advice sector and the different types of advice services they provide. Many facets of the current legislative framework are based upon the provision of financial product advice and assume industry participants are providing comprehensive financial advice.”
Decline of advice
The proportion of advised SMSFs is at lowest point since 2019, according to data from Investment Trends released this week, despite the number of advised SMSFs remaining steady.
According to figures from Wealth Data, the number of limited advisers who could specialise in SMSF advice has decreased 72 per cent since the start of 2019 from 2,901 to 781.
The industry has expected specialisations to become the norm at some point with the Financial Planning Association long arguing for it and new financial services minister Stephen Jones also providing his support.
“There’s more than one stream in the industry to date and there should be more than one stream in terms of qualifications,” Jones said during an FPA webcast in May.
“There are some obvious areas we can look at for specialisation and recognition of appropriate qualifications. There is a broad base of knowledge that is needed across all the qualifications. That would be the core, but there are specialisations within.”
More solutions needed
The association also recommended a review of the sophisticated and wholesale investor regime, as well removing ambiguity of Design and Distribution Obligations and Target Market Determinations to SMSFs.
“We believe these provisions should not apply to establishing an SMSF, adding a new member or when starting a pension,” Maroney said regarding DDO.
The association also stated limited licensing for accountants has failed and the legislative framework has created a regulatory burden and uncertainty for accountants.
