Time Running Out for Accountant Exemptions

As from 1 July 2016, all accountants will no longer be exempted from providing financial product advice without operating under a financial services licence or being competent in RG146 adviser training requirements. To cater for this new requirement the Australian Services Investment Commission (ASIC) have developed a limited Australian Financial Services Licence (AFSL) for accountants to apply for in order to continue to provide advice on superannuation, securities, managed investment schemes defined in the Corporations act of 2001, life and general insurance, and basic deposit products alike.

Since the release of the Future of Financial Advice (FOFA) reforms, ASIC has been providing guidance to accountants to meet these new requirements. These matters must be addressed on or before the 30th June 2016 prior to the accountant’s exemptions expiring.

In order to apply for a limited licence, they must have a responsible manager who has satisfied the competency requirements. Accountants that hold a public practice certificate or certificate of public practice will be able to act as a responsible managed for a limited AFSL, however if they apply before the end of June 2016 as this is part of the special transitional leeway arrangements. There will be no need for them to demonstrate experience which would be required for applications from 1 July 2016.

Accountants wishing to take advantage of transitional arrangements must comply with an additional condition of training standards set out in ASIC’s Regulatory Guide 146 (RG 146). This requires completion of training in the specialist knowledge areas of advice that they will be providing to clients: including generic knowledge, financial planning, insurance, investments, superannuation and self-managed superannuation (SMSF). Additionally, they should satisfy dispute resolution and compensation arrangements, and must hold membership to an external dispute resolution scheme.

Due to the complexity of obtaining AFSL in their own right, many accountants are turning to existing AFSL holders that provide licensing services. These services are usually in the form of an agreement for an accountant to operate under their licence as an authorised representative. By opting to become an authorised representative rather than opting for trying to obtain AFS Licensing on your own, you can switch out much of the complexity and significant time and financial investment involved in going directly to ASIC.

An authorised representative acts on the licence authorisation of the registered financial institution. In addition to saving time and money, the authorised representative maintains autonomy in their business. The terms of agreement with the financial institution include specific information regarding the operations, remuneration and compliance.

Many accountants and other financial services providers opt to take advantage of authorised representative opportunities of the existing financial services licensee over self-licensing, which is a lengthy and cumbersome process. 

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

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