Accountant’s Exemption Reform: Licensing Options

The accountant’s exemption meant that recognised accountants such as members of CPA Australia, Chartered Accounts ANZ or the Institute of Public Accountants could provide advice in interests in self-managed superannuation funds (SMSFs) without being licensed under an Australian Financial Services Licence (AFSL). As a result of Future of Financial Advice (FOFA) reforms this exemption is due to be removed from 1 July 2016.

Accountants should be aware of their options should they wish to continue to advise on SMSFs. The options include holding their own full AFSL, operate under an existing licensee as an authorised representative or apply for a limited AFSL which was implemented by ASIC aimed at the accountant’s needs.  Some of the most important considerations include the ongoing costs involved, and the amount of time and staff available to administrate each option.

Operating a full AFSL is usually the most costly and time consuming option as it requires a full comprehensive compliance plan and monitoring procedures and can require some legal assistance and additional staffing requirements.

With a limited licence, this does offer the benefits of autonomy similar to that of a full AFSL; however there is a limitation of authorisations to only a range of SMSF class of product advice. Whereas, full AFSLs offers the opportunity to add other classes of product advice upon applications to amend licence conditions with ASIC.

Existing AFSL holders sometimes offer opportunities for individuals and companies to operate under their AFSL as an authorised representative usually for a fee charged on a periodic basis. This may present the perfect opportunity for accountants who opt against owning a licence. These licensees should already have in place comprehensive compliance structures, procedures, programs and systems to follow. However, accountants that opt to operate under an existing AFSL holder must ensure that the licensee has the appropriate authorisations to meet their requirements.

With this structure, you retain the right to manage your business as you wish, and yet have access to support and resources offered by the licensee. However you will still need to be responsible in ensuring that you complete relevant compliant training courses, following documentation processes such as preparing Statement of Advice (SOA) documents and that you report to the licensee as required especially in regards to breaches.

Accountants that no longer wish to provide SMSF advice will need to look to refer their clients to other licensed accountants or financial advisers. This may be done in a joint venture or referral agreement structure. 

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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