Accountants are fast running out of time to become licensed, warns the SMSF Association’s Head of Education Services Liz Ward and Licensing for Accountants CEO Kath Bowler.
“July 1 next year might seem an eon away, but the reality is accountants who want to give financial planning and superannuation advice after this date need to start the process now.
“The first step is for accountants to decide whether they want to be part of the AFS licensing regime, and if the answer is ‘yes’ then you need to begin the training; it typically takes from a minimum of six months up to two years.”
Under the current system, accountants have an exemption under FOFA allowing them to give advice on setting up or winding up an SMSF. This exemption ends on 30 June 2016.
The SMSF Association has been working on this issue with Licensing for Accountants, an independent firm dedicated to guiding accountants through the licensing maze.
Ward and Bowler say: “From July 1, giving advice on setting or winding up an SMSF will be no different to advising on contributions, LRBAs, pensions or TTRs – if it gets into financial planning territory you will need a full or limited licence.
“If you aren’t licensed there is every possibility you will hold your business back, as well as potentially losing financial planning and superannuation revenue and clients to practitioners who are licensed.”
They say some accountants believe they can remain exempt as they only give tax advice.
“The question we’d pose to them is – are you really just giving tax advice?
“Remember, you will need to provide a disclaimer noting that you provide only tax advice, and that your clients must seek advice from a licensed financial adviser.
“But if you are taking other factors into account, such as when they can make contributions, rollover benefits, advice on the fund’s investments or commence an income stream then you will need a license.”
Ward says some accountants are working on the premise that the July 1 deadline will be extended.
“It’s worth remembering there was no extension granted to financial planners when their licensing regime was introduced. I suspect the official attitude will be that accountants have been given ample time to prepare, and it’s hard to argue with that.”
Source: SMSFA
