Accountants operating under the new SMSF advice licensing regime are uncertain about their documentation and compliance responsibilities, including the circumstances requiring a Statement of Advice (SoA), the corporate watchdog’s surveillance exercise found.
Following the expiry of the accountants’ exemption last year, the Australian Securities and Investments Commission (ASIC) visited 20 limited licensees to check on their adherence to their compliance obligations. Half had not provided advice, despite being licensed to do so.
It found licensees were unsure about what tools they needed to monitor compliance and meet their obligations. There was also uncertainty about what information was needed for the Financial Advisers Register.
Among the licensees who had not yet provided SMSF advice, their reasons included not knowing which documents they needed to provide to clients, including the conditions under which a Statement of Advice (SoA) was needed.
ASIC’s findings echo anecdotes provided by Elston Adviser Services Mark Smith, who has set up referral partnerships with several accounting firms to manage the strategic advice side.
“We’ve had a large number of firms that have dipped their toes into the licensed advice space, and found it’s actually not as simple nor as efficient as they expected or hoped it would be,” he told Professional Planner earlier this year. “We’ve also heard anecdotal stories of accountants taking over 20 hours to write an SoA, or accountants struggling to justify their billable hours versus the time [taken] to address their clients’ needs under the new licensing arrangements,” he added.
Following the surveillance exercise, ASIC has committed to providing extra education resources to help limited licensees understand their obligations. It also plans to contact licensees who have not registered any advisers on the Financial Advisers Register.
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