The corporate regulator has temporarily suspended a number of red tape requirements for financial advisers and superannuation funds, in order to assist them in providing “affordable and timely” advice to consumers affected by coronavirus crisis.
The Australian Securities and Investments Commission on Tuesday announced “three temporary relief measures” aimed at expediting the provision of advice to those in need, including on the federal government’s controversial policy to open up early access to superannuation savings.
Under the new temporary regime, financial advisers will not have to provide a “statement of advice” document to clients when providing advice about early access to super, instead permitting them to file the less time-consuming “record of advice”.
Second, tax agents will be permitted to give advice to existing clients about the early access policy even though they are ordinarily not able to provide personal advice on superannuation products.
Finally, the regulator has issued a temporary “no action position” for super fund trustees, allowing them to expand the scope of topics that can be legally provided by so-called intra-fund financial advisers employed by funds to handle member inquiries.
The regulatory relief measures will be in place for the life of the government’s early access mechanism, which is also temporary, and any advice fees relating to the policy will need to be capped at $300.
Senator Jane Hume, the assistant minister for superannuation and financial services, first hinted at a COVID-19 relief package on financial advice at the Financial Review Banking & Wealth Summit crisis briefing in March, telling delegates she was “working with” the industry and ASIC.
“We know that affordable, reliable, professional financial advice can be critical at many of life’s great milestones, and never more so than right now,” said Ms Hume, who worked for superannuation giants AustralianSuper and MLC before going into politics.
The senator welcomed ASIC’s decision in a statement on Tuesday, explaining that the measures “will help ensure all Australians impacted by the COVID-19 pandemic can quickly access the financial advice they need”.
Lobby groups representing financial advisers have been calling for red tape relief to help them meet skyrocketing demand for advice in the wake of the crisis and related volatility in financial markets.
Phil Anderson of the Association of Financial Advisers, for example, specifically called for the replacement of SOAs with ROAs for advice around early access to superannuation in an interview with the Financial Review.
However, consumer advocacy group Choice has strongly warned against any relaxation of laws governing financial advice.
“This is not a time to be reducing the standards of advice,” Choice chief executive Alan Kirkland said last week when asked about lobbyist requests for regulatory relief.
“We’re still only part way through the reforms that came out of the GFC. We haven’t finished the task of cleaning up the industry.
“If you are facing financial hardship the last thing you need to do is see a financial adviser. What you should do is see a financial counsellor.”
Tensions between Choice and the financial advice industry reached boiling point this week over similar comments made by Choice policy officer Patrick Veyret about the perceived dangers of financial advice.
“The consumer groups … are doing a disservice to the community by spreading misinformation about financial planners,” said Financial Planning Association chief executive Dante De Gori.
“Australia is in the midst of an unprecedented health crisis and slanderous remarks are completely unnecessary and unhelpful.”
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Aleks Vickovich is The Australian Financial Review’s Wealth Editor. He writes about financial advice, superannuation, investment and regulation from the AFR’s Sydney newsroom. Connect with Aleks on Twitter. Email Aleks at email@example.com