The SMSF Professionals’ Association of Australia (SPAA) strongly endorses the Financial System Inquiry’s call to improve the quality of financial advice SPAA CEO Andrea Slattery says: “Raising professional standards across the SMSF sector is what SPAA stands for so it is pleasing that the FSI, in its draft report issued today, has made this critical announcement in support of professionalism. “In the report the FSI has noted its concerns around some of the financial advice that is provided to SMSF trustees and the need for it to improve – and SPAA applauds this. “More specifically, we support a number of the policy options suggested by the FSI to improve the quality of financial advice, especially increasing minimum competency standards and requiring standards for complex areas such as SMSF advice. “We are especially pleased that the FSI has picked up on SPAA’s recommendation in its initial FSI submission to dispense with the category of ‘general’ financial advice and for this type of advice to be renamed as ‘sales’ or ‘product information’ with term ‘advice’ can only being used in relation to personal financial advice. “We believe that this would lead to consumers having greater awareness of the type of advice they are receiving and being able to make more informed financial choices. “However, SPAA does not support the implementation of a national exam for financial advisers as we believe there are too many risks inherent in this approach. “The mere passing of an exam is evidence of past knowledge and financial planning is about practical judgement and understanding the future. It is essential that financial planners are continually kept up to date by a system of accreditation that includes continuous professional development that is independently assessed in both technical and practical competencies.” On the issues of retirement incomes and Australia’s ageing demographic, SPAA acknowledges that there are emerging risks in this area. “That said, it is important to note the success of the SMSF sector in providing retirement income streams to SMSF members. “SPAA will further consider the policy options suggested by the FSI in regard to retirement incomes, but believes that product settings need to be neutral across the retirement income sector and that compulsion towards any retirement income products would undermine competition and consumer choice.” Slattery says the FSI notes the important role that SMSFs play in Australians being engaged with their
retirement savings, and delivering greater flexibility and control to SMSF members, as well as increasing completion across the superannuation sector.