The new legislation to set higher professional standards will help Australians who are confused or uninformed about what a financial adviser can do for them, the AFA believes.

The new Financial Adviser Standards and Ethics Authority regime should encompass specific training for advisers providing advice around self-managed superannuation funds (SMSFs), according to the SMSF Association.

In a submission filed with the Productivity Commission, the SMSF Association has argued that because SMSFs are complex vehicles, simply passing the necessary FASEA advice requirements should not of itself be enough.

“We believe it would be unfortunate for new advisers to be able to reach a required FASEA threshold to give financial advice and then be able to give specific SMSF advice without specific SMSF knowledge being part of the required learning outcomes,” the SMSF Association submission said.

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“This is especially pertinent when SMSF trustees, due to the self-directed nature and complexity of SMSFs, are susceptible to poor financial advice with potentially significant detrimental outcomes to individuals,” it said.

“Therefore, given this inflection point and the creation of new professional standards, FASEA and the industry have the opportunity to help protect and grow the retirement savings of Australians through an appropriate and targeted increase in SMSF education and advice standards,” the submission said.

“If FASEA decides that learning outcomes only cover SMSFs on a high level as part of any superannuation and retirement learning outcomes, the Association will continue to advocate that SMSF advice should only be able to given if further specialist learning/training is undertaken by an adviser,” it said.

The SMSF Association submission cited as an example that complex SMSF limited recourse borrowing arrangements, business real properties and related party transaction issues were not discussed in any material detail in the current education standards for advisers.

“The opportunity to reform the industry, in a key area that requires higher standards for advisers could be missed under FASEA’s proposed approach,” it said.