Majority of accountants still unlicensed, survey reveals
While there has been further movement by unlicensed accountants into the limited licensing regime since July last year, the bulk of SMSF accountants continue to remain outside the regime, a survey has shown.
SMSF compliance provider ASAP Advice conducted a survey of more than 300 SMSF accounting firms that revealed that at 1 July 2016, 66 per cent of firms did not have an accountant with either their own licence or an authorised representative status.
A second survey conducted more recently shows that since then, 90 per cent of these unlicensed firms still remain unlicensed, according to ASAP Advice chief executive Jim Hennington.
Mr Hennington said there were two main reasons why accounting firms chose not to become licensed. They either did not believe their firm provided financial advice or they preferred to refer their SMSF clients to external financial planners.
“On average, the firms we surveyed looked after 63 SMSFs each and they believed their client bank only required 14 statements of advice per year,” he said.
“If you’re only going to need 14 statements of advice throughout the year, then the overhead of having an AFSL doesn’t seem to make sense.”
The most common way these unlicensed accountants planned to deal with the issue of licensing is by referring clients to external planners or using a digital advice provider.
Mr Hennington said the survey results indicate that accountants have a good understanding of when they need to have statements of advice for transactions.
"On average they get involved with about 14 of these types of transactions per year and they believe they need 14 statements of advice per year. So what that tells me is that they know that it can't be avoided,"he 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.