The accountants’ exemption is now officially phased out and accountants providing SMSF advice need to be operating under either a limited or full AFSL.
The accounting community has been warned on various occasions, including by ASIC and industry lawyers who work closely with ASIC, that non-compliers will be not be afforded a grace period of any kind.
One industry consultant, director at Wilkinson Super, Mark Wilkinson, believes accountants should brace themselves for some “clear demonstrations” that ASIC will be taking no prisoners with accountants who have failed to implement appropriate procedures under the new regime.
“What I suspect is that ASIC will do some shadow shopping, they’ll collect some information from the tax office around establishment, they’ll talk to trustees about who is giving them the advice in certain circumstances,” Mr Wilkinson said.
“There will be some clear demonstrations that accountants who give advice without being licensed risk prosecutions – ASIC will be putting everyone else on notice,” he said.
“I think they’ve got to, to a certain extent, because it’s the only way ASIC will be able to get its message across.”
Mr Wilkinson noted the regulator’s ‘take no prisoners’ approach is consistent with the government’s public push to increase professionalism and quality in financial advice.
“I’m not convinced that the level of advice provided by a lot of financial planners is all that flash either around this area. So when you put the changes together and look forward five or six or ten years, I think the level of advice will be much better,” he said.
ASIC have Shadow Shopped Financial Planners for years, its real, it happens. If I was you, for your own sake, I wouldn’t dismiss ASIC’s “threat” to Shadow Shop accountants.
Sure concerned accountant, it wasn’t the ‘tax planning’ done by accountants to put their clients into forestry products that was one of the causes of FOFA. Accountants earning the bulk of their revenue from accounting (although who would know given the size of the commissions) and just dabbling in financial planning (at best) or simply licensed by one of the forestry groups via a limited license (the worst) were the biggest sellers of forestry/agri schemes. I’ve been a planner for almost 20 years and have never had a client invest in any of the forestry/agri schemes, but I know plenty of accountants who have. I had one accountant from the Hills district proudly tell me he invested $10M of clients money into Willmott Forests and the good people at Willmott sent him a cheque for $1M. And that was just his first year…
The same as what happens when the SMSF trustee refuses to hire an accountant. You make your recommendation to cover your butt and let them get on doing their own thing. Whether its right or not is nobody else’s business but the members. The auditor is the only professional that an SMSF trustee need hire.
If you are an accountant Louise I assume providing ongoing tax advice is what you do, so no issues there, but you shouldn’t be providing financial advice unless you’re licensed.
So what happens when you have a SMSF who quite openly REFUSES to hire a financial planner to guide them. I cannot and do not. The auditor is the same. However the auditor and I would still have a duty of care to ensure that the SMSF maintains compliant with the ATO. Is this going to be construed as financial or taxation advice?
Seriously? I would expect that this “industry advisor” is yet another financial planner, trying to “beat-up” the whole licencing farce, in order to benefit from the perceived honey pot of clients that they believe might be persuaded to leave their existing accountant. .
Only the ASIC knows what it is going to do, as well as, perhaps, their political masters.
As to all this talk of “shadow shopping”, well what a precedent that would set. After all, it is the fibs told by the investment industry that started the whole FOFA legislation.
Imagine shadow shopping Financial Planners as well. And while they are at it, perhaps shadow shopping police in the highway patrol, or maybe even politicians. Maybe ICAC needs to start shadow shopping as well. mmm I would be willing to wager that there would suddenly be some legislation that would make shadow shopping illegal as in America where it is called entrapment.
Please people, stop the BS and start sticking to what is best for the client.