The SMSF Professionals’ Association of Australia (SPAA) has released an explanatory note for the limited Australian Financial Services Licence (AFSL) to clarify the new rules for accountants providing SMSF-related advice.
Currently, the Corporations Act provides accountants with an exemption from acquiring an AFSL for services relating to the set-up and closure of SMSFs. From 30 June 2016, this will be replaced by a new conditional licensing regime for professional accountants.
The commencement date of the limited licence is 1 July 2013, meaning accountants and other advisers wanting a limited licence can apply to the Australian Securities Investment Comission (ASIC) after this date, SPAA explained.
“Holding a limited licence means that you will be able to legally discuss all aspects of superannuation, rather than just SMSF. You will be able to discuss the broad insurance and financial advice needs of your clients,” SPAA stated.
“An alternative to becoming licensed in your own right would be to become an authorised representative of a licence holder.”
During the transition period from 1 July 2013 to 1 July 2016, streamlining arrangements will be available to accountants who hold a public practice certificate from one of the professional accounting bodies, SPAA noted.
“It is important to note that accountants taking advantage of the streamlined experience requirements may need to undergo a knowledge update review at the end of three years to ensure their skills are up to date, the details of which are yet to be released.”
While accountants and other advisers can apply for the new limited licence, SPAA pointed out that ASIC is able to approve a limited licence on the basis of whether the applicant meets their existing training requirements to hold a licence to provide financial advice.
In addition, accountants and other advisers will need to comply with the relevant training and education requirements prescribed in RG146 and RG105.
“This will ensure that only accountants with appropriate skills and knowledge are authorised to provide financial advice under the new authorisations,” SPAA stated.
SPAA also indicated that unlicensed accountants who continue to provide services that require licensing will face “severe penalties” from ASIC and potentially face legal action.
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