As of midnight on June 30th, a fourteen-year-old exemption from the 2002 Financial Services Reform Act will be removed for accountants. During that time, accountants have been able to provide advice on the establishment of Self-Managed Superannuation Funds (a pivotal area of advice for many accountants and their clients) without the need for an AFSL (Australian Financial Services License) or the many documents needed to be provided to clients by financial planners, who are not exempt from FSRA.
On July 1st, accountants will need to have made a choice about how they continue to discuss SMSFs with their clients. Choice one is to take up the new limited license developed by ASIC specifically for accountants wishing to continue providing SMSF advice. This license is limited to specific areas of SMSF advice and will require accountants to meet the same requirements of financial planners, such as completing the necessary upfront and ongoing training and providing a Statement of Advice to each SMSF client.
Choice two is to skip past the limited license and take up a full financial planning license and provide accounting and financial planning advice to their clients. Although this provides a lot of opportunity to broaden client relationships, the workload involved in managing two advice regimes has put off most accountants from taking up this option.
Lastly, accounting firms have the option of hiring a dedicated financial planner, or partnering with a financial plan firm, to provide the advice needed by their clients on SMSF and the accompanying investment scenarios.
Each choice has its benefits and drawbacks and, whatever option accountants choose, change is most definitely coming. And soon.