A parliamentary committee has rejected a push from the financial services industry to tighten the regulation of accountants who provide superannuation advice.
The Parliamentary Joint Committee on Corporations and Financial Services yesterday recommended that accountants continue to be exempt from needing an Australian Financial Services Licence (AFSL) when giving advice about the structure and operation of self-managed super funds (SMSF).
Chaired by Senator Grant Chapman, the committee, which oversees ASIC, agreed with peak accounting body CPA Australia that the current exemption be broadened to include limited advice on all super products.
In a report into the super industry, the committee said accountants need to hold an AFSL when providing financial advice but not when advising on super contribution levels and consolidating super investments.
The FPA and the Investment and Financial Services Association (IFSA) had called for the exemption to be axed.
FPA chief executive Jo-Anne Bloch said every professional who provides advice in the area should be suitably licensed.
“We believe that providing advice is something that you should be licensed to do and that you should not stop and start the process,” Bloch told the committee.
IFSA chief executive Richard Gilbert said excluding accountants from licensing arrangements was not sustainable.
“If you broaden the exemption there will be many more that won’t be licensed,” Gilbert said.
In its submission to the inquiry, IFSA pointed to the corporate regulator’s covert investigation of the super advice industry last year that found 78 per cent of accountants gave consumers illegal advice about super.
The SMSF Professionals Association said ASIC’s educational standard for giving SMSF advice was too low.
The committee made 31 recommendations aimed to simply the complex and inconsistent laws and regulations governing super.
It recommended that ASIC work with industry to provide investors more disclosure around so-called shelf space fees between fund managers and dealer groups.
It also called for ASIC to make financial planners disclose the ownership structure of their licensee when giving advice about super.
Roy Morgan research released last month found many consumers who relied on advice to purchase super did not realise their adviser was employed by the manufacturer of that product.
