An ASIC spokesperson told SMSF Adviser late last week that is has, to date, approved 149 applications for a limited licence, up from 100 in early April.
A further 308 applications are currently under assessment, up from 228, while 193 applications have been withdrawn by applicants after receiving feedback from ASIC.
“These numbers fall far short of the expected number of applications provided by the joint accounting bodies,” the spokesperson said.
While ASIC expects to have assessed all applications that were received by the 1 March soft deadline prior to 1 July, there are concerns for late lodging accountants.
“ASIC will continue to receive applications up to the 1 July deadline, however, accountants are reminded that they will not be able to provide SMSF advice or operate the SMSF part of the business until their licence is approved,” the spokesperson said.
This is consistent with the warnings issued by ASIC commissioner Greg Tanzer, who said the regulator will not be light on compliance come 1 July this year.
“Frankly, if you decide after 1 July to give advice on establishing or operating an SMSF and you don’t have the requisite licence, where you’re not operating under a licence for someone who does, you’re acting illegally,” Mr Tanzer said.
“Then you’re joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally.”
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Ralph, if you have been documenting it in a compliant SOA meeting all ‘know your client’ and best interest duty requirements’, that’s great, you will hardly be effected by the changes.
Thing is, like a lot of financial planners, you may be absolutely great and provide top advice…. Unfortunately many don’t…
Accountant’s are now getting a taste of what financial planners have had to adhere to for years now. Documented justification and liability. Many are kicking and screaming about it.
Smithy, I and most competent accountants have ben documenting their advice for years.
Accountants have to tailor the advice to suit a specific situation rather then filling in boxes on a SOA. The financial planning record process is much closer to preparing a range of documents. I found it surprising how much various firm’s financial planning documents resemble each other, it was more a case of fill in a template then personalised advice. There is a lot less “cut and paste” involved in accounting documents.
Ralphie!! So all Accountants already document all their advice…. in which reality? I have and do still deal extensively with a/c’s and that is utter nonsense.
“Inexperienced in complexity” & “documented accountability” makes no sense within this specific frame of reference – that could equally relate to teachers or the police force, with as much intelligence as your comment.
There is a vast difference in ‘preparing’ a range of correct documents for clients versus fully documenting your advice in its entirety, something that will become painfully obvious I am sure in due course post 1 July.
Phillip, both the CPA and IPA do include a unit on financial planning as part of their qualifications and have done so for many years.
To be a qualified tax agent you need a university degree plus a post graduate qualification. This is in stark contrast to the qualifications that some financial planners hold.
Accountants have always had to document their work, a failure to do so costs them their Tax Agent or professional accreditation status. Assuming that accountants are inexperienced in complexity or in documented accountability shows a lack of understanding of what accountants do.
This may be the hub of the problem. Accountants advice is different to Financial Advisors advice in that accountants do not generally give advice on what types of specific investments the SMSF should buy or sell as would a financial planner or advisor. To rule out accountants from giving any advice unless registered as a FP curtails the client from getting a second and unbiased opinion. Accountants should not give specific investment advice, only general advice from a tax or client overall tax position as a trusted professional. It seems the system has overlooked that special position an accountant has with their client and placed them on the same level as the scammers to the detriment of all. Perhaps the accounting bodies should include a course of financial advising as part of the accountants training and qualification to get around this impasse??? Updated for spelling!!!
A dichotomy for auditors who are also accountants, if they are unlicensed and are asked to advise clients on questions on running their SMSF, or should they only reply in their management letter or audit report? Perhaps they should recommend the client seeks a licensed financial advisor to tell the client about operating their SMSF and give the answer which will help keep the audit fee low. I am sure the client would appreciate this stance..not! Great forward planning from accounting bodies shown here!
When we are providing advice that can completely shape a client’s financial situation for good or bad it should have to be in writing. We should also be accountable for this advice. Financial Planner or Accountant. This is more common sense than anything.
I agree its rough on someone that has been providing great advice for 20 years but like every industry it is the minority of bad apples that ruin it for the rest…
There are plenty of SMSFs with 20k balances sitting in cash floating around… Fees equating to 10% p.a.+ based on ‘advice’.
Times change Chris, need to move with them as well. You used to do your accounts in big green ledgers, I’m sure you don’t do that any more. Like many accountants who have given undocumented and unlicensed advice for many years, you’ll find the changes required to be compliant in a post FOFA world will be significantly higher than you’re accustomed to currently
[quote name=”Chris”]” joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally”
Yeah, it’s great being a chartered accountant who has advised on this stuff for 20 years. How wonderful it is to be presumed to be on the same level as the scammers mentioned above.[/quote]
I wonder how many of his “investment scammers” have a licence?
Chris you sound like the old planners 20 years ago when FSR first hit and they had to actually put their advice in writing, they too had the mantra ‘But I have been advising my clients for the last 20 years…”.
Rules are rules it is as simple as that.
Welcome to the world of giving advice in Australia, and documented accountability.
” joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally”
Yeah, it’s great being a chartered accountant who has advised on this stuff for 20 years. How wonderful it is to be presumed to be on the same level as the scammers mentioned above.