More warnings sound on restrictions of limited AFSL
For accountants willing to take on some extra work – and risk – it may be more beneficial to look at a full AFSL or authorisation under a full licence, given the limitations of the limited licence, one industry lawyer has warned.
Jaime Lumsden Kelly of The Fold Legal told SMSF Adviser that the various restrictions of the limited licence prevent accountants from being able to provide a full service to their clients.
“They have to bring in other financial planners and life insurance experts to be able to provide full services for clients so for accountants who want to be able to retain that control themselves, there’s a lot of value in it,” she said.
The main hurdle for accountants who might want to go down this path remains the three-year experience requirement, given there are no transitional arrangements for the full licence, she said.
Accountants would therefore need to provide financial planning under another full ASFL before applying for their own.
Bluepoint Consulting adviser Tony Bates agrees that it may be worthwhile for accountants to look at the full AFSL or authorisation under a full licence since he considers the limited licence to be the least appealing option for them.
“[It] adds a whole lot of new compliance, new costs, new risks, new supervision for doing what they have always been able to do,” he argues.
“I can understand their frustration because they are not really going to be able to pass these costs and liabilities to their clients.”
Limited licences, under which accountants are limited to discussing advice on establishing an SMSF, contributing to it and commencing pensions, may leave “accountants stranded”, he warned.
“I just think that you might be better off going for the full licence; [otherwise], it’s a lot of headache, a lot of compliance, a lot of risk, for no new benefit," Mr Bates said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.