For Accountants

Accountants – new licensing regime

The Federal Government recently announced that the current accountants’ exemption allowing *recognised accountants to provide advice on self-managed superannuation funds, without the need for an Australian Financial Services Licence, will cease on 1 July 2016. Further, accountants wanting to enter the SMSF advice area who are currently not members of one of the three industry associations will need to be licensed, or be authorised by an existing AFS licensee from 1 July 2013.

What does this mean for your business?

From July 2016 accountants will be unable to recommend the establishment or winding up of a self-managed superannuation fund (SMSF) unless they hold the limited Australian Financial Services Licence or they are authorised through an appropriate licence holder (AFSL) such as Lifespan.

Before you can become authorised or licensed, you must first meet the training requirements as defined in ASIC’s Regulatory Guide 146 Licensing: Training of financial product advisors (RG 146).

The legislation does provide some exemptions for accountants when they provide advice in the following areas:

  • traditional accounting activities
  • broad asset allocation advice, and
  • taxation advice

These exemptions allow accountants to give some broad “advice” to clients relating to the tax consequences of investing in particular financial products such as superannuation, however the nature of the advice that can be provided to clients is restricted to self-managed superannuation fund (SMSF) and class of product advice and in almost all instances this advice must be followed up with a disclaimer that the client should seek further advice from a licensed financial planner before making a decision.

At a minimum, accountants who obtain a new limited license, or who are authorised under an appropriate licensee, will be able to provide financial advice on self-managed superannuation funds (SMSF) and class of product advice relating to:

  • superannuation products;
  • securities;
  • simple managed investment schemes as defined in the Corporations Regulations 2001;
  • general and life insurance; and
  • basic deposit products.

Class of product advice

Class of product advice is financial advice that does not make a recommendation (in form or in substance) about a specific financial product. Accountants will be able to make recommendations in relation to the client’s existing superannuation funds to the extent needed when making a recommendation to establish an SMSF or when providing advice to clients on contributions or pensions.

If an accountant wishes to provide additional advice services beyond these specific areas then they will be required to obtain sufficient qualification under RG146 to allow them to meet the standards required to hold a full AFS license or obtain the necessary additional authorisation from the licensee.

As a result of these changes many progressive accountants are seeking to embrace the provision of additional financial services (risk, lending and planning) like never before.

Lifespan currently offers accountants numerous licensing options to help meet the needs of your business and your clients.

To explore these options in greater detail please contact a member of the Lifespan Advice Development team today on 02 9252 2000 for a confidential discussion about your current and future licensing requirements.

*Qualifying (“recognised”) accountants are those accountants who are currently members of the Institute of Public Accountants (IPA), CPA Australia or The Institute of Chartered Accountants in Australia.