ASIC has already signalled that it has no intention of providing a further grace period to accountants who don’t act now to become authorised, and only five months remain until the 1 March 2016 ‘soft deadline’ for licensing.
Accountants who apply for a limited licence, but have not yet had it granted by 1 July 2016, or who otherwise remain unlicensed and unauthorised, will need to stop providing advice on self-managed superannuation funds until they are appointed as an authorised representative or obtain their own licence. ASIC is already actively monitoring the SMSF space, and has made it clear that providing unlicensed financial services is a criminal offence and unlicensed providers face regulatory action.
Time is running faster than you know, and accountants still undecided need to act quickly. Completion of the required training, preparation of the licence application, and ASIC assessment of the application can easily take up to nine months depending on the pathways chosen and the available time and resources of the partner allocated to manage licensing. There is a significant risk that accountants who lodge their application after 1 March won’t have a licence by 1 July 2016.
Accountants who delay applying until after the 30 June 2016 cut-off will need to demonstrate to ASIC that they have at least 3 years’ experience in SMSF advice. They will also find it difficult to demonstrate sufficient experience for ‘class of product’ authorisations in financial products such as securities and life insurance without admitting a prior breach of the Corporations Act or otherwise acting as an authorised representative for 3 years.
Of the 180 limited licence applications so far lodged, ASIC has granted only 74, with common reasons for rejection still including:
- Incomplete applications;
- Not following ASIC’s guidance in Information Sheet 179; and
- Inadequate RG146 training.
While accountants are capable of managing their own licence application successfully, at this late stage we recommend professional support to maximise the chances of obtaining a limited licence before 1 July 2016. We can take the management of your licence application out of your hands for as little as $7700.
