Accountants moving into the AFSL regime are underestimating the complexities and compliance requisites of financial advice, according to Association of Financial Advice chief executive Brad Fox.
Speaking at an event in Sydney last month, Mr Fox said many accountants do not fully understand what the new licensing regime will mean for their businesses.
"There are going to be a lot of issues to work through on this. The clarity about professional indemnity insurance is one," he said.
"Where does the accounting PI start and stop? Do they even know they have to get separate financial advice PI? It's not covered under the accounting one.
"I don't know that [accountants have] grasped the complexity that the financial advice world lives in," he added.
As reported earlier this month by SMSF Adviser, ASIC has approved 149 applications for a limited licence, up from 100 in early April.
A further 308 applications are currently under assessment, up from 228, while 193 applications have been withdrawn by applicants after receiving feedback from ASIC.
It is unclear how many have become authorised representatives in anticipation of the accountants’ exemption phase-out on 1 July; however, it is expected this will be the overwhelmingly popular choice for accountants.
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