'Significant upswing’ in licensing activity as changes loom
Awareness about mandatory education for SMSF professionals is on the rise, and some dealer groups are seeing a big upswing in applications for authorised representative status.
To qualify for the transitional arrangements under guidance set by the Financial Adviser Standards and Ethics Authority (FASEA), accountants must be authorised under an AFSL by January next year.
The transitional arrangements allow for accountants with a related degree - which is the category most accountants will fall into - to complete bridging courses as opposed to start from scratch with compulsory tertiary-level training and education.
This upcoming deadline he said is forcing many accountants who were previously undecided about licensing to make a decision in order to take advantage of the requirements, according to director of Hayes Knight, Greg Hayes.
Initially, Hayes Knight found a lot of the accounting industry hadn’t paid a lot of attention to the new standards, he said, which is now beginning to change.
“We held a roadshow [event] across the country and spoke to over 600 accountants. Less than two per cent of the audience were fully aware of what the changes were,” he said.
“We’ve certainly been trying to increase awareness about these changes in the marketplace so that accountants can make their decision.”
Mr Hayes said the dealer groups he manages, GPS Wealth and the Merit Wealth, have “started to see a very significant upswing” in the number of professionals approaching them to become licensed.
“We've had a very significant upswing in the number of applications over the past two months. We expect that to continue through to the later part of this year as people become aware of the changes and hop off the fence and say yes we need to set ourselves up for the future of the SMSF space,” he said.
Mr Hayes estimates there are probably still over a thousand accountants who are undecided about licensing.
“I think what we'll see over the coming months is a lot of those firms making a decision and deciding whether they're in or out. If they're going to be in then they’ll need to prepare for this new environment that we're entering into,” he said.
“Accountants really need to be thinking about the types of services they’re going to be providing their client base and what their requirements are going to be in the future,” said Mr Hayes.
“You wouldn’t want to come back from holidays in January next year and decide you want to do it and find out it’s too late. It’ll be a new environment then because once you get past 1 January you can no longer transition.”
If they don’t make the decision till after the 1 January deadline, Mr Hayes explained that accountants will be in the same category as new entrants and will be required to complete a full financial services degree.