SMSF Association urges specialist training for advisers

The SMSF Association has said that more specialist training is needed for those advising members of a self-managed super fund (SMSF) to sustain full health of the SMSF sector.

In its submission to the Quality of Advice Review, the association said that those providing SMSF advice should be required to have completed specialist education which would put their qualifications in line with the Productivity Commission’s 2018 Superannuation report, the Financial Adviser Standards and Ethics Authority (FASEA’s) Financial Planners and Advisers Code of Ethics 2019 Guide and the Australian Securities and Investment (ASIC’s) Report 575.

Further to that, according to the association, financial advisers should have also an access to essential client Australian Taxation Office (ATO) superannuation reports.

SMSF Association’s chief executive, John Maroney, stressed that the introduction of multiple Total Superannuation Balance thresholds and the pension Transfer Balance Caps in 2017 added further complexity to the provision of superannuation advice.

Maroney also said that, given that 63% of SMSFs were established on the suggestion of an adviser and 81% of SMSFs used some form of adviser, it was crucial that an approved course or accreditation should be completed along with ongoing professional development which should be maintained.

“If members and trustees do not understand their obligations and the time required to manage an SMSF, this can not only result in severe penalties and sanctions, but a lack of effective engagement and management causing significant financial detriment,” he noted.

Other key points in the Association’s submission were:

• Limited licensing for accountants has failed. There were several issues under the legislative framework that created a regulatory burden and uncertainty for accountants (licensed and unlicensed).
• A comprehensive review of the sophisticated and wholesale investor regime was needed. Using this regime for the sole purpose of minimising the compliance burden for advisers was not appropriate.
• Removing ambiguity regarding the application of the design and distribution obligations (DDOs) and target market determinations to SMSFs. These provisions should not apply to establishing an SMSF, adding a new member or when starting a pension.

Maroney stressed that in order to maintain the professionalisation of the sector, the industry needed to recognise “the various industry participants operating in the financial advice sector and the different types of advice services they provide”.

According to data, more than 1.1 million Australians who were members of SMSFs were currently receiving advice.