CPAA questions adviser super skills
Clientsmay be facing “poorer” and “fragmented” advice on superannuation fund structures under the Financial Services Reform Act (FSRA) if accountants are prevented from giving this advice, according toCPA Australia.
CPA Australia financial planning manager Kath Bowler says that clients may be forced to go to a financial planner and also a registered tax agent or lawyer to get complete advice on structures.
She says because tax is an important consideration for super fund structures, and many planners are not licensed to give in-depth tax advice, clients may have to split up their advice which will leave them worse off.
She says that once the superannuation structure has been set up, advice is most likely to be needed from a licensed financial adviser.
However, when the structure has no investments inside of it, she says it is just a shell that is driven by tax, succession planning and business planning issues, for which accountants are better equipped.
“When getting advice on structural issues, the biggest driver on the structure for both super and non-super advice is tax. It is not the only driver but it is a key factor,” she says.
“What we have been asking all along is that advice on issues to do with superannuation fund structures do not form part of financial product advice that needs to be regulated under FSR,” Bowler says.
A recommendation was released last week by the Federal Joint Parliamentary Committee on Corporations and Financial Services that accountants should be able to legally provide this type of advice without an Australian Financial Services Licence (AFSL).
The recommendation is now to be considered by the Federal Government, which will decide if accountants will be able to provide the advice.
TheFinancial Planning Associationvigorously responded to the committee’s recommendation, with chief executive Ken Breakspear saying that if the recommendation was accepted, it would open up a huge discrepancy in the licensing process and significantly devalue the FSRA.
AUTHOR
Recommended for you
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
