Accountable director David Moss said the restrictions imposed on the Accountants AFSL will hamper accountants’ ability to service their clients and it will be costly and complex to administer.

“We do not believe that many accountants will go down the path of applying for their own licence,” Mr Moss said.

The Minister for Financial Services & Superannuation, Bill Shorten last week released draft regulations removing the Accountants’ Exemption on SMSF advice. It included the introduction of a “streamlined” Australian Financial Services Licence (AFSL) option for accountants from 1 July 2013.

Mr Moss said for most accountants, joining an existing AFSL would be the simpler and more cost-effective option. “By their own estimates, the Government has stated that the initial and ongoing costs of operating an “Accountant’s AFSL” to be between $10,000 and $20,000 per year,” he said. “Also, the majority of accountants have never been licenced previously and have little experience and knowledge of how a financial services licence works on a day to day basis”.

Accountable Financial Solutions is one of several AFSLs who now cater for accountants who are seeking to provide advice to their SMSF clients.                                                                                                    

The proposed Accountants AFSL would likely prove too restrictive for accountants looking to provide their clients with an adequate level of service. Mr Moss said it would allow accountants to provide “financial product advice” on SMSFs, however, it did not specifically address what areas of SMSFs accountants could advise on; for example, areas such as contributions, rollovers, borrowing arrangements, lump sums and pensions.

It will also allow accountants to provide “financial product advice on superannuation” already held by a client but only in consideration of a client establishing a SMSF, making contributions or starting a pension. There is no indication in the current proposal as to whether this covers other areas such as roll-overs.

In other areas, including superannuation (for example, clients in personal and corporate super plans), Term Deposits, Managed Funds, Shares and Insurance, accountants will only be able to provide “class of product advice” (or general advice), with no mention of specific products or securities.

“Our view is that the draft regulations and the new Accountants AFSL fail to provide accountants with a way to effectively meet the demands of their clients,” Mr Moss said.

“Accountants want to be able to advise their clients on all matters associated with SMSFs, including setups, contributions, roll-overs/super consolidation, borrowing arrangements, lump sums and pensions. And, clients expect their accountants to provide this advice.”

Accountants who choose to apply for the Accountants AFSL or become licensed under an existing AFSL will be required to meet ASIC’s minimum Regulatory Guide 146 (RG146) training requirements.

Accountable is advising accountants to firstly ensure that they meet ASIC’s minimum training requirements under RG146. Accountable estimates that over 80% of accountants do not currently meet the minimum RG146 requirements.

Accountable also advises accountants looking to join an existing licensee to do their homework before they choose. “There are few licensees out there that have been developed by accountants for accountants”, Mr Moss said.

Mr Moss said that Accountable was the only non-institutionally owned licence that was solely focused on licensing and training accountants.

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