Accountants accused of overselling super

By John Wilkinson

and George Liondis

Accountants have been accused of gearing up to oversell self-managed superannuation under choice of fund rules.

Investment and Financial Services Association (IFSA) chief executive Richard Gilbert said last week the association would renew lobbying of the Federal Government to have an exemption that allows accountants to advise on superannuation without a Financial Services Reform (FSR) licence rolled back.

In a speech to fund managers in Melbourne last week, Gilbert said the exponential growth in the number of self-managed funds, which was expected to escalate further under choice, was a serious concern.

“Some weakness in choice is the growth of do-it-yourself superannuation funds,” he said.

“Any industry sector that is growing at that rate is going to run into difficulties.”

The number of self-managed superannuation funds is currently increasing by about 30,000 a year and IFSA believes the accounting profession is behind the growth.

Accountants were given the exemption from the FSR licensing requirements in 2003, but Gilbert said with the July 1 choice start date looming, it was time to revisit the issue.

“The advice accountants are giving on superannuation is not covered by FSR,” he said.

“We will be asking the government to roll back the exemptions given to accountants under FSR.”

IFSA’s push was given some support by the Financial Planning Association (FPA).

FPA manager of policy and government relations John Anning said: “It is an issue that there is and exemption for accountants from the regulations that other advisers have to follow, but our concern about self-managed super funds goes beyond that focus on accountants.

“People need to realise that self-managed funds are not for everyone.”

But the chief body for the accounting profession, CPA Australia, rejected the accusations.

CPA Australia manager of financial planning Kathy Bowler said accountants would advise some clients to move to self-managed funds, but only in instances where it was warranted.

“It will not be appropriate for many to switch across to self-managed funds, but there are bound to be individuals for whom a self-managed fund is appropriate,” she said.

Bowler said the attack on accountants was motivated by self-interest on the part of fund managers, who stood to loose out if people moved out of their superannuation products to set up their own funds.

“I think it is a misunderstanding that accountants are going to encroach on anyone’s turf,” she said.

“It is a fear that a lot of institutions that have a vested interest might hold.”