Accountants warned on ownership conditions with licensees

Accountants warned on ownership conditions with licensees

One business broker has warned that some big name licensees have “very strict ownership stipulations” that accountants looking to provide SMSF advice beyond 1 July this year may not be aware of.

Paul Tynan, founder and principal of Connect Financial Service Brokers, noted that in such a “highly-charged environment” with the end of the accountants’ exemption looming, accountants need to be particularly careful when choosing a licensee.

“They might find that their future business opportunities and retirement/exit/succession objectives could be put at risk if the wrong licensee is selected,” Mr Tynan said.

“Some licensee agreements have very strict ownership stipulations, especially those by licensees that operate within the big four major banks, AMP and IOOF.”

Mr Tynan urged accountants who value independence as the key platform of their client service and advice offering to exercise great care when assessing and selecting a licensee agreement.

“As part of a Connect due diligence for one accountant, the principal was horrified to learn that the prospective dealer group he considered joining was bank-owned and contra to his personal and professional requirement for independence and not to be aligned with a major institution.”

Mr Tynan reiterated the importance of treading cautiously when considering licensing offerings, and urged accountants to seek expert advice for the best AFSL framework that maximises the potential value of their practice in line with the principal’s succession and exit aspirations.

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Accountants warned on ownership conditions with licensees
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