Accountants to shun institutional licensees
Accountants are likely to shun bank-aligned licensees when the accountants’ exemption expires in 2016, with one practitioner suggesting accountants are “fiercely independent.”
Speaking to SMSF Adviser, John McIlroy, executive director of Crystal Wealth Partners, said those accountants seeking to become authorised representatives before June 2016 are likely to approach non-institutional licensees.
“I think there’s going to be a substantial proportion of them that will be looking for a more independent option,” Mr McIlroy said.
Mr McIlroy also told SMSF Adviser’s sister publication AccountantsDaily that many accountants are too independent to align themselves with an institutional licensee.
“[Institutional licensees] are kidding themselves if they think fiercely independent accountants are going to sign up in droves to an institutional licensing offer which then directs where their clients invest,” he said.
“To think they are going to go and get licensed to an institution which then restricts what they can advise about and also what products they can recommend to their client, I think they’re kidding themselves. A lot of accountants just won’t do it.”
Pathways Licensee Services general manager Kate Humphries also told SMSF Adviser that accountants generally want to have control of their own destiny and want to be free to provide high quality advice to their clients.
“They don’t want to be aligned to a particular distribution channel, so for those reasons they usually lean towards obtaining their own licences,” she said.
“I suppose the benefits of holding your own are, well, the holder of a full AFSL is able to provide an end-to-end client solution that is all about the best interests of their client.
“Whereas if they are authorised they are limited to somebody else’s product list and the rules of that particular licence,” she added.
David Moss, director at Accountable Financial Group, previously told SMSF Adviser accountants who become authorised representatives are unlikely to join a bank’s licence.
“Banks are interested in one thing when it comes to accountants and financial planners: distribution. That’s the only word they care about,” he said.
“The number one thing for accountants is that they want to help their clients and they want to do it without being told ‘you have to sell this product'."
