Several industry bodies have praised regulators for relaxing rules around how financial advice is given during the Covid-19 crisis.
The Australian Securities and Investments Commission (ASIC) announced yesterday that registered tax agents (RTAs) would be allowed to temporarily give advice about early access to superannuation without having to hold an Australian Financial Services (AFS) licence.
Financial planners providers won't need to give a statement of advice (SOA) to clients when providing advice about early access to superannuation, and they will also have access to simplified advice documents instead of a long and complex statement of advice.
These decisions have been made to help the sector adjust to new rules permitting individuals to access their superannuation early if they are facing financial hardship due to the virus outbreak.
"The decision to access superannuation early is significant and many Australians will seek assistance from superannuation funds, financial advisers and registered tax agents before deciding whether to access the early release scheme," ASIC said.
The new measures are the result of lobbying from five major professional bodies CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ), SMSF Association (SMSFA), Financial Planning Association (FPA) and Institute of Public Accountants (IPA).
In an announcement yesterday, the groups said they had joined forces to ensure Australians can get the advice they need to understand the Federal Government's COVID-19 economic packages, including early access to their superannuation.
"There has been an increasing demand for advice around early access to super since the Government announced Australians could access up to two parcels of $10,000 in superannuation tax-free as part of their second stimulus," the joint bodies said.
"We have come together and collectively worked with ASIC to help the Australian community and to ensure there are more skilled advisers in the marketplace to address this demand.
"This move has removed significant red tape and ensured a simple, streamlined process is in place so those facing financial hardship during this time get the right advice."
CPA Australia CEO Andrew Hunter said these unprecedented times called for a pragmatic approach to regulation and a commitment from the associations to work together in the public interest.
"Over 600,000 people have registered their interest accessing their super early, so there is great need for support. It's important that these people and others also considering their options can access professional advice," Hunter said.
"As trusted advisers, accountants are well-placed to provide individuals with advice and many already have an existing relationship with their accountant. This is therefore an excellent extension for clients," added CA ANZ group executive for advocacy & professional standing, Simon Grant.
FPA CEO Dante De Gori said Australians can sleep better at night knowing they have a professional financial planner assisting them in managing their financial position, which is "second only to their health in personal importance".
"This is welcome and timely relief from ASIC to assist our members in supporting as many Australian's as possible through the financial crisis caused by this pandemic, and demonstrates ASIC acting on sensible calls from professional associations," De Gori said.
SMSF Association CEO John Maroney said the professional bodies had worked together with ASIC to provide regulatory relief for financial advisers and registered tax agents that allow them to provide advice in the most efficient, timely and cost-effective way to individuals in the current environment.
"The decision to access superannuation early is a significant one with a long-term impact on individuals' retirement savings, so for them to be able to speak to an accountant or adviser for a small fee to get the advice they need without sacrificing safeguards is welcomed," Maroney said.
"At this time in particular, Australians need access to high quality financial advice. Decisions around superannuation are critical to quality of life. For this reason, a decision to access superannuation early should be based on advice that is easily accessible," added IPA CEO Andrew Conway.
Around 9 per cent of the 10,323 submissions made to the Royal Commission into the banking, superannuation and finance sectors related to financial advice.
Updated at 10:19am AEST on 15 April 2020.
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