At the end of August, ASIC had received only 161 applications for the limited licence.
“This number is very low if you consider the number of accountants who are likely to rely on the exemption,” said ASIC senior manager Trevor Clarke at the Chartered Accountants Australia and New Zealand National SMSF Conference on the Gold Coast earlier this week.
Of that 161, 70 have been approved, seven are currently under assessment and 82 have been withdrawn by the applicant because they had supplied insufficient information.
One applicant converted from a limited to a full licence, and “interestingly”, one application had an offer withdrawn after information surfaced that was not originally disclosed to ASIC, Mr Clarke said.
Some of the common issues that ASIC has seen in applications include insufficient evidence of training course completion, failure to include critical mandatory financial information, and failure to provide evidence of adequate professional indemnity insurance, Mr Clarke said.
“If issues can be rectified easily, we will give the applicant the chance to do so. However, if it can’t, we will give the applicant the option of withdrawing the application so they can attend to the issue,” he said.
Mr Clarke also expressed concern about those accountants who have yet to lodge their limited licence applications.
“Those who delay lodging their application until soon before June 2016 may very well find themselves unable to advise on SMSFs for a period of time until we finalise the assessment of the application,” Mr Clarke said.
“If we receive an influx of applications, depending on the numbers, processing the applications may take several months.
“We encouraged accountants applying to do so by 1 March 2016. This date is not mandatory, but if you lodge it past this date, you are facing significant risk that the application will not be assessed before 30 June [2016],” he said.
I’m guessing that the majority of accountants will go for the option of being an authorised rep under someone else’s licence, and not go for their own AFSL due to costs, knowledge and time restrictions.
The accountants that I work with have opted for the limited licence option provided by my AFSL, and simply view the cost as an ‘insurance policy’ in the situation where they inadvertently stray over the line from factual info to personal advice.
It must be fast approaching the point where it is clear these reforms are cruising for spectacular failure with only a tiny % of accountants signing up. The so far non compliers either believe they will be only providing factual information post June 2016 or there is almost a quasi civil disobedience type attitude being taken to it. One does wonder what ASIC will do? Is going to jail three quarters of the accounting profession?
It is also bizarre that we are told we desperately need these reforms to the status quo yet the status quo is so bad that it is entirely safe and reasonable to leave the status quo in place for 3 whole years. Time to admit these are reforms in search of an ACTUAL problem and simplest thing is to scrap them and reinstate the accountants exemption.