Accountants who are SMSF Professionals’ Association of Australia (SPAA) members are getting on board with the new licensing regime ahead of the accountants’ exemption expiry in 2016, the association has said.
One quarter of accountants who are SPAA members and not operating under an Australian financial services licence (AFSL) have decided to apply for a limited licence or become an authorised representative (AR) of a licensee, according to SPAA.
Results from polling conducted at SPAA events indicate another 50 per cent of members who are not licensed accountants are “seriously considering this option”, with 25 per cent indicating they may not apply for a limited licence or become an AR.
“Quite clearly members are thinking seriously about this issue and we would expect many of those considering this option to ultimately commit to it,” SPAA’s head of education services, Liz Ward, said.
“We think it is great that there are many accountants that have already formally committed themselves to being in this sector.”
Ms Ward added that although the current accountants’ exemption expires in three years, accountants should be aware this is a “considerable process” that should not be left too late.
“Those who elect to be early adopters of the new regime and formally move into the SMSF advice space are likely to realise commercial benefits compared with those who come to it late,” Ms Ward said.
“We would encourage those who are thinking, but yet to decide, to research their options and if SMSF advice is part of their business future, to take the lead and start moving in that direction.”
Ms Ward added it is essential that accountants decide what best suits their business model and understand there are pros and cons to being an AR as opposed to getting a licence directly with the Australian Securities and Investments Commission – whether full or limited.
The benefits of becoming an AR include professional indemnity insurance considerations; however, Ms Ward also drew attention to the cost issues involved.
“There are a range of costs that are being cited: we are hearing that the price to prepare and submit an application for a limited licence may in the vicinity of $25,000 to $35,000 in the first year,” she said.
“This includes compliance consultancy fees to compile the application and having all the components required to support the application in place. A DIY approach is an option and could provide cost savings but like all DIYs, usually results in an increase in the time [required].”
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