Speaking to SMSF Adviser, Jaime Lumsden Kelly from legal firm The Fold said ASIC has cited recurrent mistakes, including the failure of accountants to undertake correct training and obtain the correct personal indemnity insurance.
“[Accountants] understand they need training for SMSFs but they’re not necessarily getting training for the other financial products they are applying for,” said Ms Lumsden Kelly.
“Accountants should be clear about the authorisations they require for the services they provide and make sure they have completed the required RG146 training for the products they intend to provide advice on.”
Those who are unsure of the adequacy of their personal indemnity insurance should consult a specialist broker, Ms Lumsden Kelly added.
Ms Lumsden Kelly said ASIC has also cited accountants’ submitting financial accounts for the wrong entity as an issue in the application process to date.
“Material deficiencies” both in the documentation and the information provided by applicants was the main reason provided by ASIC for approving fewer than half of applications in the first half of the year.
While ASIC has not provided an indication of what documents have commonly been missing from applications other than those relating to PI insurance and financial accounts issues, Ms Lumsden Kelly said the missing documentation is likely to relate to compliance obligations.
“Some of the most common documents that ASIC asks for in addition to the standard suite of documents they require relate to compliance,” she said.
Ms Lumsden Kelly also said the process will be simpler if accountants familiarise themselves with ongoing AFS licence obligations.
“The application will ask how the accountant proposes to comply with the obligations; to complete it, they need to know what the obligations are and how they propose to manage them,” she said.
“Ideally, their compliance procedures would be in place before they apply, but they certainly need to be ready by the time their AFS licence is issued.”
Well said GeorgeV. I do not give advice as to whether to set up a super fund or not. I discuss the pros and cons of an SMSF, discuss the compliance of a fund, the costs of running a fund from a tax accounting perspective and on-going I assist with documentation or discuss the tax advantages of a pension.
I am not interested in advice as to which fund is better or what product or share to invest in, never have been and never will be regardless of licensing. That is not my expertise, I prefer to leave that to the experts.
The ONLY reason I will look at some form of licensing is so that I do not accidentally fall over some arbitrary line that ASIC sets. Sadly George, if ASIC takes you on, they will not be taking on the profession because most have a vested interest in having you licensed. The ICAA have their “specialisation” for which they charge additional fees, additional training from which they earn training revenue – I would not be relying on them for support.
Farcical! But why bother with licensing?
Accountants fill a vital role of providing factual information on super compliance and taxation in a mentoring role. Post 1 July 2016 most accountants will continue to provide important factual advice, and “execution only” services to SMSF trustees. I would love to see ASIC take on the accounting profession over what is factual, helpful and necessary advice to SMSF trustees, not a “recommendation” under their “narrow” interpretation of their “broad” definition.
Bring it on I say!