ASIC’s decision today to grant relief for Australians to seek advice from professional accountants and financial planners in making decisions about their financial position due to COVID-19 is a great outcome. This decision makes it easier to seek advice, in particular with areas such as the early release of super on compassionate grounds where in excess of 700,000 people have pre-registered their interest with the ATO.
The real joy here however is how this outcome has been achieved… Five major Australian professional bodies – CPA, CAANZ, IPA, SMSF Association and FPA Australia collectively working together to advocate for improving access to advice during these uncertain times. Profession-driven outcomes to benefit consumers, approved by Regulators, not the other way around which has become far too common place in recent years.
Given the significance of the Government’s decision to allow individuals facing particular financial hardship due to the coronavirus pandemic for access superannuation early – up to $10,000 in 2019-20 and also 2020-21 (until 24 September 2020), seeking advice is important, whether from super funds, financial advisers or registered tax agents. To assist the affordable provision of advice, ASIC’s relief has:
- allowed advice providers not to give a statement of advice (SOA) to clients when providing advice about early access to superannuation;
- permitted registered tax agents to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services (AFS) licence; and
- issued a temporary no-action position for super trustees to expand the scope of personal advice that may be provided by, or on behalf of, the superannuation trustee as ‘intra-fund advice’.
It is important to note that ASIC’s relief and no-action position are temporary and subject to the important conditions, including:
- the advice provider (adviser or tax agent) must provide the client a record of advice (ROA), which meets certain requirements within ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355
- the advice fee, if any, is capped at $300;
- the advice provider must establish that the client is entitled to the early release of their superannuation; and
- the client must have approached the advice provider for the advice.
ASIC will conduct surveillance activities to monitor the advice provided under this relief, to ensure that advisers, registered tax agents and superannuation trustees are acting in the interests of their clients and members.
Future consumer centric outcomes
Importantly, this collective of professional bodies have already begun undertaking work to create a more consumer-centric advice framework. Let’s hope that this difficult period can actually create some positive outcomes for the consumers and the profession.
For more information about the ASIC relief: