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ASIC loosens financial advice rules amid COVID-19

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
15 April 2020 1 minute readShare

ASIC has rolled out a series of temporary measures in response to the coronavirus crisis, allowing accountants without a financial services licence to provide advice to clients looking to access their super early.

The regulator announced three temporary relief measures on Tuesday, allowing registered tax agents to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services (AFS) licence.

The move follows the government’s early access to super measure, which allows individuals facing financial hardship due to the COVID-19 pandemic to access their superannuation early — up to $10,000 in 2019–2020 and a further $10,000 in 2020–2021.

So far, over 600,000 Australians have registered their interest, translating into an increased demand for professional advice.

To meet these needs, ASIC will also allow advice providers not to give a statement of advice (SOA) to clients when providing advice about early access to superannuation.

“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 regulator explained that its relief and no-action position will, however, be subject to a number of conditions, including capping the advice fee at $300.

Clients must also be provided with a record of advice (ROA), which meets certain content requirements.

Moreover, 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 noted it will conduct surveillance activities to ensure that advisers, registered tax agents and superannuation trustees are acting in the interests of their clients and members.

Professional bodies form alliance

Responding to ASIC’s eased measures, five major Australian professional bodies announced they have joined forces to ensure Australians get the advice they need to understand the government’s COVID-19 economic packages.

The bodies include CPA Australia, the Chartered Accountants Australia and New Zealand (CA ANZ), the SMSF Association (SMSFA), the Financial Planning Association (FPA) and the Institute of Public Accountants (IPA).

“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 package,” the joint bodies said in a statement on Tuesday.

“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.”

ASIC loosens financial advice rules amid COVID-19
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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