The peak body for the self-managed super sector is calling for the end of limited licensing for professionals dealing with SMSFs.
Outlining its 2020/21 Federal Budget submission today, the SMSF Association said limited licensing should be phased out in favour of a customer-centric framework designed to raise standards and close gaps in advice.
According to SMSFA chief executive John Maroney, the limited licensing system is "defunct" and requires an overhaul to raise standards and close gaps in advice, to allow qualified SMSF advisers to provide low-cost, simple advice.
The association labelled the current framework "complicated, inefficient and able to be worked around."
"If an SMSF trustee wants to seek advice regarding the establishment of a pension from their accountant, unlicensed accountants are unable to provide this simple advice," Maroney.
"Licensed advisers can provide this simple advice, but it involves costly documentation disproportionate to the advice sought.
"The desired policy outcomes from introducing limited licensing have not been achieved. Individuals have unmet needs, advisers face high regulatory costs and accountants are strangled by regulation."
To that end, the association said its proposed "new customer-centric advice framework" will be designed with "improved SMSF advice" as a critical element.
"As we state in our Budget submission, the ultimate goal is to advocate for reform that reduces complexity, improves efficiency and drives harmonisation to better enable the provision of affordable, accessible and quality advice to business and consumers," Maroney said.
Additionally, the association's submission is calling for the ATO to allow greater access to its portal for licensed advisers, who currently have no means for accessing ATO portal information directly from the tax office.
"Currently, only registered tax agents (typically accountants) are able to access its portal to get total superannuation balance and transfer balance cap information that is crucial for SMSF advice," Maroney added.
"Ironically, these individuals are generally not able to provide SMSF advice as they are not licensed with ASIC."
There is a fundamental lack of information for SMSF advisers who need to provide timely advice based on myriad of complex caps, thresholds and balances, Maroney said.
"Accountants can get information but cannot provide advice and financial advisers are unable to get information but are the individuals able to provide advice," he said.
"This jeopardises the quality of advice being provided to members."