SMSF firms hitting roadblocks with licence upgrades
ASIC has been urged to introduce mechanisms that simplify the transition from a limited licence to full AFSL for accounting firms, with the current process often “prohibitively expensive” for firms.
A joint paper written by consultancy firm Licensing for Accountants and law firm Holley Nethercote said the limited licence regime was introduced to provide accountants with a solution to become licensed without the need to operate under someone else’s licence with traditional advisory authorities or full AFSL.
Licensing for Accountants chief executive Kath Bowler said some practices are finding that the limited licence is not meeting their needs, however, and that they now want to operate under their own full AFSL.
“This is prohibitively expensive, because it requires the licensee to find a responsible manager with the necessary experience,” Ms Bowler explained.
“A licensee cannot also be an authorised representative of another licensee. Also, limited licensees obtained the limited licence so as to avoid needing a full licence or operating under someone else’s licence.”
Accountants have been left in a situation where if they do want to expand, then they have to operate under someone else, she explained.
This goes against the whole intention of the regime, she said, which was designed to create a way for consumers to receive advice, with accountants ideally placed to be able to advise clients who haven’t been otherwise advised.
“So rather than constantly putting up roadblocks stopping them, [we should be] looking at it a different way, looking at how can we make this work, how can we encourage more accountants to provide advice and how we can encourage closer working relationships between accountants and planners,” she said.
“There needs to be a mechanism that allows accountants to upgrade to a full AFSL without bringing in new responsible managers. Whilst existing limited licence responsible managers do not have specific product experience, ASIC should consider some sort of transitional acknowledgement, coupled with a licensed oversight component.”
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.