“Given all the focus at the moment on reducing the cost of advice, this announcement, which will have the effect of pushing up the cost of advice, is contrary to the government’s stated objective of enhancing the affordability and accessibility of financial advice,” she said.

“It is estimated this change in the treatment of GST on adviser fees will increase the cost of advice to impacted consumers by around 7 per cent and it is likely to impact many thousands of super fund members and their long-term retirement savings. The cost to the industry in terms of changes to systems and the supporting fee disclosure documentation should also not be overlooked.”

Scotchbrook added that to preserve the status quo and to support the advice industry which in recent times has been crippled by the rising cost of sector-based levies, the SMSFA is asking the government to amend the law to ensure the previous interpretation of the treatment of adviser fees is retained.

“This could be achieved by a relatively simple legislative amendment to preserve the approach adopted by industry and supported by multiple private binding rulings,” she said.

In the interim, the association has called on ASIC to join the ATO on its no-compliance approach. Noting the transitional period should be extended beyond 30 June to provide certainty and clarity, as both product issuers and financial advisers scramble to comply with this unexpected change and identify, notify and engage with impacted clients.