With the number of accountants applying for limited licences substantially lower than initial predictions, and a reported lag in the take-up of the authorised representative option, it seems a significant chunk of the accounting community will choose not to enter the AFSL regime after 1 July this year.
Nathan Jacobson, Perpetual’s accountants partnerships general manager, noted that even those accountants choosing not to pursue the licensing route need to be aware of their compliance obligations to avoid regulatory action.
“One of those is there’s policy and procedure training implications for businesses, so they can demonstrate that they’re not providing advice,” he said.
“Essentially, if ASIC comes knocking, how do you substantiate that if there is an SMSF being set up that it wasn’t you providing the advice? There will be file notes you need to keep to demonstrate that you didn’t discuss or give advice on the set-up of an SMSF, for example,” he said.
“This is a major decision. If accountants are choosing that they don’t want to become licensed then that’s actually OK, but they still need to put some important things in place.”
Accountants will also need to be cautious and selective with their referral partners. Mr Jacobson noted referral relationships are becoming an increasingly popular option for accountants.
“We’re encouraging [accountants] to understand the breadth of services that a referral partner can actually do for you. Do you want one holistic provider who can take care of your clients’ needs, or do you want to be working with multiple parties with one solution? How important to you is the independence of that advice provider? Are you comfortable with the way that they give advice?”
Good article Nathan, I would also add the concept of “arranging” if accountants don’t know what that is they can go to Reg Guide 36 Section D in particular RG 36.37 & 38 RG36.42 & 43 and Table 2. Most people “referring” are “arranging”. This is a sleeper for those who think they can ignore the new licensing environment.
Scaremongering
And what about accountants that are getting limited AFSL status because their association tells them too? Yet they don’t want to actually give formal written advice because they already have a good referral relationship and / or they now realise how much work is involved in AFSL compliance even for strategy only, establishment, contributions, TRIS and pensions, death benefit noms, etc
They will also have to be really careful they don’t continue to provide bucket loads of AFSL advice (as lots currently do) without any AFSL compliance.
Be interesting to see if ASIC actually do anything besides media threats ??