Remove accountants’ exemption immediately, says AIST
In a move labelled “nonsensical” by the Institute of Public Accountants (IPA), the Australian Institute of Superannuation Trustees (AIST) has recommended the immediate removal of the current accountants’ exemption, rather than allowing a three-year phase out.
AIST was responding to questions on notice that were posed following a recent hearing before the Parliamentary Joint Committee (PJC) on Corporations and Financial Services regarding gatekeepers in the industry.
van Eyk chief executive Mark Thomas had suggested in the hearing that the largest expectation gap within the industry was around the regulation of SMSFs and how people are being licensed to establish them. AIST was asked to comment on this and whether the area needed reform.
AIST said expectations of and behaviour within SMSFs should, as far as possible, be placed on a level playing field with the “rigorously governed” Australian Prudential Regulation Authority (APRA)-regulated funds.
It recommended the removal of the current accountants’ licensing exemption allowing accountants to advise on the set-up and closure of SMSFs without an Australian Financial Services licence, or at a minimum that the exemption phase-out should be cut back from three years to six months.
This recommendation was strongly opposed by the IPA, with chief executive office Andrew Conway calling it “nonsensical and devoid of reality”.
“If you were to remove the transitional provisions, what you’re basically saying is you want to shut the door on potentially thousands of qualified practitioners providing advice to clients,” Mr Conway said.
“It strikes at the heart of the government policy intention of maintaining access to affordable financial advice.”
Mr Conway also said cutting the transition period to six months would still be problematic for practitioners needing to make changes to their businesses. The three-year timeframe is practical and “more than reasonable”, he added.
“We’ve had three years of extensive consultation on the accountants’ exemption, and also working with the government to encourage accountants into the licensing regime,” Mr Conway said.
“By way of practical implication, it must have a form of transition to ensure people move into the new system, and that’s what we’ve achieved.”
- Yes we should all work together and I do as I have 2 great planning firms I use depending on the needs of the client. I wouldn't ever direct investments myself. As for spelling, it is generational I admit and I guess many people don't know what is wrong anymore. Or so my kids tell me when I tell them off.0
- Agree Barbie, the planning industry is only in it's infancy and an "industry". The CFP mark has only just required a degree plus undergraduate and or & graduate status plus experience. There has certainly been cowboys and yet some excellent professional members. In the same way cowboys in the planning industry have caused over regulation and lack of consumer confidence to planners such as myself,Changing times, new uses of SMSF, "some" cowboys amongst accountants, the right political party in power(Labor),is bringing over regulation onto accountants. So to blatantly blame planners for this legislation & throw in some insults is just crazy. As an association I would be looking inwardly saying how do we ensure our members are exceeding government minimums as opposed to looking at scapegoats. It's nice to read something from yourself without slagging off financial planners or someone's spelling. Why can't planners and accountants work together to weed out the cowboys altogether?0
- Some very sane comments on here at last. I do agree that ICAA stepped into the financial planning field too strongly. But their aim was to ensure professionalism as so many financial planes BACK THEN were ex insurance salesmen with little education. (OK Jason hit me with the next rant). Overall I couldn't care less what ends up happening as I specialise in tax. But has been interesting to read the arguments on both sides.0
- Chris, seems like your "industry association" has done such as great job of regulation that the Government is now also stepping in. Also it appears also to be stepping in for the public interest. Times have changed. Accountants have no one else to blame but themselves (& Bill Shorten) for this over regulation, don't blame planners,and slagging off planners won't help.0
- All of the known "professions" like lawyers and accountants self regulate.
Financial advisers were so unruly that Government needed to step in and regulate them to protect the public interest. That is why other professionals resent being told by financial advisers what they should or shouldnt do, because they hold a "licence" to do it. Thats also why accountants are so resentful of being dragged into your over-bearing ASIC licensing regime. We just didnt earn your punishment so why should we be tarred with the same brush. An FP is only as good as their education and experience, like the rest of us.
Ask an accountant or a lawyer what job they did before their profession. Usually, they were at school then Uni. Ask a financial planner and they always have a story about a previous occupation which all too often has nothing to do with investments or taxation e.g car salesman, bra salesman, farmer, are a few that I have heard.0 - Gerard the voice of reason. Everyone's got a horror story about an accountant or financial planner. I think the professional bodies are responsible for not regulationg the industry as strictly as they should, allowing the standard of practitioners overall to suffer.0
- There have been some gross exaggerations here about all accountants doing this and all financial planners doing that. How about some clear thinking: some accountants do the wrong thing, and so do some financial planners. These groups are the ones that need more education or in some cases reprimanding.
I am both a chartered accountant and financial planner (CFP) and see both sides of the problem.
CAs must do 120 hours of CPD over a 3 year period and CFPs about the same.
Whatever the outcome some planners will fall into a big trap if they start advising on tax and some accountants will mess up when it comes to planning.
All the unjustified criticism here (and it's not all unjustified) is making it more difficult for accountants and planners to work together and respect each other.0 - In my experience it is very common, far too common, for unlicensed accountants to stray well outside the provisions of the SMSF exemption. The cause what accountants perceived to be the extent of the exemption. Three year transition is far too long & 12 months would be adequate. As for AISTs other idea ie to require full APRA prudential requirements for smsf's , it could be seen as self serving & such an approach would be unnecessary overkill .0
- Barbie Chiro. It would be great if there was more accountants like yourself who stuck to what they are best at, that being the providing of tax advice. However times have moved on and most accountants are now "selling" SMSF and no longer just giving tax advice or just setting up a SMSF, but actively involved in recommending investments, types of asset classes and rollover of other super funds. Yes, you believe in your neck of the woods it is the opposite but my experience is vastly different to yours. Given the other comments here a lot of others also feel tax advice is not the only thing being offered in the SMSF sphere and hence why greater consumer protection is warranted. On another note; you dug a pretty big gutter and then got down into the dirt and started throwing mud so don't complain about getting dirty. Is it true that you only require 10 hours of CPD training a year to be a Reg Tax agent?0
- Goodness me this site has been a revelation to me. I am a well recognised tax consultant mate not a number cruncher. The misogyny on here is amazing. I stand by my point that banks and planners TRY to put my clients into SMSFs without valid reasons. My comments have become harsher as more planners make outrageous statements. I feel very sorry for you all if you are all so bitter.0