With the deadline looming for the phase-out of the accountants’ exemption, Katarina Taurian examines how the sector is responding to the new limited licensing regime
Financial planners have long argued that the playing field, when it comes to the provision of SMSF advice, is uneven. Historically, accountants have been able to provide SMSF advice under an exemption, while planners are required to be licensed under an Australian Financial Services Licence (AFSL).
However, following lengthy Future of Financial Advice negotiations, from July 2016 accountants will also need to be licensed, either under a limited or a full AFSL, to provide advice on SMSFs.
The new limited licence, initially proposed in 2012 and finalised in 2013, allows practitioners to advise on setting up or closing SMSFs and also to give class of product advice.
The licence does not, however, allow the recommendation of specific products or allow accountants to provide more complex or holistic types of advice, such as transition to retirement or insurance advice.
With accountants and planners soon having to meet the same compliance and regulatory standards to provide SMSF advice, the playing field has, arguably, now been levelled. Still, debates concerning the effectiveness of the new regime have raged since it was announced by the corporate regulator.
Several key industry figures have been vocal in criticising the options now available for accountants wishing to provide SMSF advice – to operate under a licence that is restrictive or to venture into unknown territory and operate under a fully-fledged AFSL.
As expected, some industry associations have fiercely defended the structure of the limited licence, and praised the new regime as an opportunity for accountants to develop and grow their existing business models.
In spite of the mixed reactions, one thing’s for certain: change is again on its way for the SMSF regulatory landscape, and those in the business of SMSF advice will need to decide soon whether they are in or whether they are out.
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