Speaking to SMSF Adviser’s sister publication AccountantsDaily, Greg Hayes, joint managing director at Hayes Knight, said so long as accountants can continue to operate under the exemption there is no impetus to act now.
“To do so would simply bring on additional cost, work and professional development responsibility,” he said.
“The current market commentary expressing surprise at the lack of action by accountants to date reflects a lack of understanding of the accounting market.”
Mr Hayes’ call is, however, at odds with recent warnings from many industry stakeholders.
The industry bodies have been a strong voice in calling for accountants to act now, which Mr Hayes described as understandable, but cautioned that what is good for the industry as a whole may not be cost effective for individual firms.
“From the industry bodies’ point of view, their concern is that we get to 1 July 2016 and the accountants haven’t done anything, or enough of their membership haven’t done anything, and then all of a sudden the media will be saying accountants have had two years to prepare for this and done nothing.
“From the industry bodies’ point of view, that puts the profession in a bad light because they weren’t the profession to be taking a leading role.”
Mr Hayes said many of the other institutions calling on accountants to act now have more self-serving interests.
“From the institutions’ point of view, who are out there saying, ‘we have a solution for you’, it is much more about the benefit to the institution than the benefit for the accountant.”
Our clear message to accounting firms is ‘do not rush’, said Mr Hayes.
“We have plenty of examples of firms who have rushed into something and said, ‘Oh hold on, I think I’ve done the wrong thing, I don’t think I’ve done what is going to necessarily be best for me’.
“You actually do have time to think about this, work out what is going to be best for your firm, what your business model is going to be like and then start to put in place the pieces that need to be there.
“The market knows they don’t need to be rushed and they don’t want to rushed; they want to take a considered view and then they want to get themselves either authorised or licensed at the time that’s appropriate for them,” Mr Hayes said.
Knowledge Shop, an associated company of Hayes Knight, provides practice support services to more than 1,500 accounting firms across Australia, including webinars on the licensing issue.
“This engagement gives us a very good pulse of what the accounting profession is thinking at any time,” Mr Hayes said.
“The majority of firms that we speak with are using the current year to consider and decide between their options. 2015 will be the year to complete any necessary training or qualification and they will have their position in place during the first half of 2016,” he said.
Michael, I will have to disagree with you about what a client wants. The majority of our clients do not want us to give them investment advice. They want to do their own investing mainly due to a combination of high fees and poor returns from their past financial planners. What they want from accountants is tax advice and help with administration and compliance, none of which areas that should require another license.
Tony,I find that talking about the tax implications of Transition to retirement pensions and the allowable contribution limits are what clients want. They want to know the tax and administration facts,which is information I can give them, rather then having to pay hundreds of $$ for wads of documents and pretty coloured charts.
With respect, financial planner’s fees was one of the main drivers behind the surge in setting up SMSF’s. The new regime appears an exercise in charging accountants fees to replace lost income from SMSF’s
The “cause” of the problem is that registered accountants should not be required to apply. It is a total waste of money to expect professional accountants to register to do something that most of us have been already been doing for many years. Frankly any experienced accountant does know how to advise on setting up and managing a SMSF (other than for the investment advice, of course) Why incur additional costs that will have to be passed on? For no gain to the customer. This whole requirement smacks of undue influence being applied by the larger financial organisations. Shame on the large accounting bodies who did not raise objections when this whole mess was first proposed.
I agree with Michael’s comments. We operate a licensee for accountants, particularly for those with SMSF clients, and have been educating accountants on what areas they can and cannot advise their superannuation and SMSF clients. The Accountants’ Exemption is misleading. It only exempts accountants from recommending a client establish or wind up an SMSF. They cannot advise a client to maximise their contributions, rollover existing superannuation benefits, transition to retirement, etc. Most accountants agree that their clients expect them to advise them on such strategies. The biggest hurdle for accountants is the issue of cost. To counterbalance this issue, accountants should also be asking: What revenue could I be generating?
Through our experience of the last three years, we can demonstrate to accountants how they can generate more than enough revenue to offset the cost of being licensed.
Greg
I respect your long and wide knowledge but you are wrong on this one and possibly one of the causes of the problem. Accountants cannot advise clients on how to optimise their super options unless they take on board some sort of AFSL. Just telling a client about how to set up a fund and doing nothing further is not what the client wants or what is really happening. So we have clients and accountants openly breaking the law because the law does not meet their needs. Great until someone decides to take issue with it. Accountants need to equip themselves now for the task or leave it to someone else. Many are not doing either because of commentators like you giving them a false feeling of comfort that they can continue as they are without qualifying what that actually is. I am quite sure you are not encouraging anyone to break the law intentionally. Problem is some will use your advice out of context.