Australian accountants are highly unlikely to take up the financial services license as it is currently proposed, according to specialists Accountable Financial Solutions.

Accountable director David Moss said the restrictions imposed on the Accountants Australian Financial Services Licence (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,” Moss said.

As part of the government’s Future of Financial Advice (FoFA) reforms, a new limited AFSL was drafted and introduced last month.

This replaces the current accountant’s exemption on SMSF advice with Minister for Financial Services and Superannuation, Bill Shorten, upbeat on up to 10,000 accountants becoming licensed under the new regulation.

Accountants can consider applying for the “streamlined” AFSL option for from July 1 2013.

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However, Moss argues that, 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.”

The proposed Accountants AFSL would also likely prove too restrictive for accountants looking to provide their clients with an adequate level of service.

Moss believes it will allow accountants to provide “financial product advice” on SMSFs, however he claims it does not specifically address what areas of SMSFs accountants could advise on; for example, areas such as contributions, rollovers, borrowing arrangements, lump sums and pensions.

Managing expectation 

The new regulation 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.