Limited AFSL to increase risk of unlicensed SMSF advice
One legal and compliance consultant has expressed concern that the limited licensing regime, which will be in full swing next year, may make it more tempting for accountants to step outside the scope of their legal authorisation.
One of the current pitfalls in the SMSF sector is the ease at which accountants and advisers can provide advice they’re not authorised to give, said Sophie Gerber, principal of consultancy firm Sophie Grace.
“For example, most accountants have a range of clients, all of whom have superannuation. There is the potential in their capacity as an accountant that they step outside of this role and provide financial advice in relation to superannuation,” she told SMSF Adviser.
“I think what happens is that they’re trying to look after their clients and they either forget, or it’s verbal and it doesn’t get written down, but then it comes back to bite them later if something goes wrong with that particular investment,” she added.
Ms Gerber expressed concern that the risk of unauthorised advice will be heightened when the new licencing regime for accountants officially begins in June next year.
It’s “very difficult” to stay within the scope of a limited AFSL, she said.
“Once you start giving limited advice people are going to keep coming back to you for more and more advice,” she said.
“We would definitely encourage SMSF accountants and advisers to seek this new limited AFSL and take advantage of the transition period offered by ASIC.
“For accountants looking after a number of clients with various investments and financial interests, obtaining an AFSL provides a very promising opportunity for them to explore.”