Speaking to SMSF Adviser, Hayes Knight director Greg Hayes said while the adviser levy imposed under ASIC’s industry funding model has not had a significant impact on the uptake of advisers by full advice firms, it has affected accounting firms operating in the limited advice space.
“For the accountants in the limited advice space, it has been another cost,” Mr Hayes said.
“The experience for a lot of accountants has been that they jumped onto a licence prior to the removal of the accountants’ exemption, then they found out there was going to be more educational requirements and an exam, and the cost for that exam, and then they had to add the cost of ASIC levy [on top of that].”
While all of those things by themselves are not significant, he said, collectively they are significant, particularly if accountants are viewing it more as a compliance cost rather than a business opportunity.
“Many accountants jumped onto a licence in the beginning simply because it was the cost of doing business and they wanted to continue doing what they had done in the past rather than the fact they wanted to build a business in this area,” he said.
“All of a sudden, there has been all these additional requirements and costs. What this has made them realise is that they actually need to build a business opportunity out of this.”
Mr Hayes said for accountants who do want to expand their services into the advice area, the FASEA standards represent a big opportunity, given the shift that is expected to take place in the market.
“Over the next two years, there is going to be this massive shift in terms of where people get advice. We’re going to see a significant retraction in advisers from the marketplace while demand for advice continues to grow, so there’s going to be a lot of movement in terms of where people get advice from,” he said.
“For accountants, this is a significant opportunity to take advantage of the market and reposition themselves in the SMSF space.”
Last month, ASIC stated that a reduction in the fees under its funding model for advisers operating in the limited advice space only would require legislative amendment.
This was in response to lobbying by Chartered Accountants Australia and New Zealand which stated that accountants were likely to leave the advice space due to a number of rising costs, including the need to comply with the Financial Adviser Standards and Ethics Authority’s education reforms.
Just be unlicensed like most accountants. They have to pay a fee – suck it up and pay it or don’t give advice. It’s not that hard.
I think the way licensing has played out over the past 3 years is as follows:
* [b]Self-managed [/b]Super Funds don’t want to pay for ‘licensed’ advice. They are happy with facts, tax advice and a few hints and nudges then will sign a disclaimer rather than pay for an SOA
* There are a labrynth of remaining exemptions for accountants (see ASIC INFO 216) and so ASIC are really only enforcing AFSLs if you proactively give recommendations (i.e. you sell SMSFs as opposed to just giving guidance)
This may be wrong but it’s 3 years now and nobody has been held to account that we know of. Nor is there any written practical guidance on how much influence an accountant can give under the banners of facts, tax advice, hints and nudges without it tripping the advice line.
Many elements of truth in this article