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.”
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