Just when we needed you most

From the editor- Darin Tyson Chan, Inaugural SMSF Association Trade Media Journalist of the Year

Changes to the laws and regulations having a direct impact on the superannuation industry are currently occurring, it can be argued, at a volume that may never have been seen before.

Just to name a couple, in the past few weeks we’ve seen the bill to legislate many of the initiatives announced in this year’s budget, such as scrapping the work test for individuals under the age of 75 wanting to make non-concessional contributions, introduced to the parliament.

And the move to permanently allow the electronic approval of legal documents, such as SMSF trust deeds and financial statements, by law also continues to gain momentum.

Most of the amendments to the system that are afoot, or have already taken place, have been lauded by the SMSF community as positive changes, so this is a good thing. However, this vote of confidence does not mean these changes will not cause some confusion and complications for trustees, who will no doubt look for assistance to navigate situations by way of a financial adviser.

Let’s take a closer look at the last of the aforementioned items to illustrate this point. The use of electronic signatures for legal document approval is being governed by revisions to the Electronic Transactions Act. However, in an SMSF context, exactly which documents can be signed off in this manner is determined by the Superannuation Industry (Supervision) (SIS) Act and SIS Regulations. This means items such as investment strategies and written plans for managing in-house assets will still require a wet signature.

I would challenge even the most well-read and informed SMSF trustee to know this without getting some sort of professional assistance.

But the government seems to be saying to trustees “good luck with that” by so far ignoring developments on another front – the push for professionalism within financial advisory ranks with measures imposed by bodies such as the Financial Adviser Standards and Ethics Authority. Don’t get me wrong, I believe the move to increased professionalism is a good thing; I’m just questioning the way Canberra is going about it and what the resulting outcomes have been to date.

Just last week research firm Adviser Ratings reported 505 advisers left the industry in the third quarter of 2021, while only 75 individuals joined after successfully completing their professional year of education, resulting in a net reduction of 430.

The most concerning factor is adviser numbers are continuing to fall and the professional-year statistic represented the highest number of new entrants in two years.

So joining the dots together there is clear evidence the changes to the legal and regulatory circumstances of SMSF trustees is elevating the importance of receiving professional financial advice right at a time when adviser numbers are perpetually on the slide. Surely this is not what anyone wants.

Recently, Superannuation, Financial Services and the Digital Economy Minister Jane Hume conceded the government will have to revisit the non-arm’s-length expenditure rules due to their egregious nature. Can we then be hopeful a rethink on the implementation of the reforms to the financial advice industry might also be possible?

If not, the Randy VanWarmer hit of the ‘70s will spring to mind for many SMSF trustees as they lament the government-triggered financial adviser exodus happened “just when I/[we] needed you most”.