FASEA, licensing weeding out good accountants, warns mid-tier

Mr Minter said he was concerned that fewer and fewer accountants are in a position to actually advice clients now because of the need to be licensed and all of the hoops and adviser needs to jump through in terms of statements of advice and other documentation.

“It’s adding to cost, complexity, delays and, in some cases, I’m seeing clients who just aren’t getting the advice that they need,” he said.

In addition to the requirements with licensing, accountants who want to provide advice will soon also have to meet the new education standards set by the Financial Adviser Standards and Ethics Authority (FASEA).

“I know that the Institute of Chartered Accountants are starting to make a little bit of noise around this issue of education requirements that are coming up. There should be some recognition of the professional standing of a chartered accountant and the obligations they have to have from an educational perspective,” he said.

“We need to rethink whether the current licensing regime really is in everyone’s best interests. I have concerns that it’s not. I’m not sure that it’s actually weeding out the people that do the wrong thing. It’s weeding out some good advisers because it’s all just too hard and there’s too many hurdles to get licensed and do the educational requirements.”

Those who do offer unscrupulous advice, he said, are unlikely to worry about “jumping through the hoops for licensing and instead play on the edge” by labelling their services as execution only.

“You hear stories of people playing in that sort of space. It’s not a level playing field when you’re trying to do the right thing and follow all the requirements. So that to me is a big issue,” said Mr Minter.

Given the recent findings of the royal commission, it will be difficult to convince the general public to cut some of the red tape around licensing, he warned.

“We’ve just come out of a royal commission, so I don’t think the general public would support any conversation about licensing because there’s a perception that everyone out there is doing the wrong thing and we need more regulation to protect consumers from dodgy advisers,” he said.

“All we’re doing though is adding red tape, complexity and cost. There has to be a happy medium in there somewhere to deal with that, but I suspect nothing is going to happen about it in the current environment.”