A make-or-break year looms for both financial advisers servicing the self-managed super fund (SMSF) sector and those considering a move into this increasingly competitive space.
The SMSF Professionals’ Association of Australia (SPAA) education and professional standards director, Graeme Colley, says changes in the pipeline for specialist auditors, accountants and financial advisers will radically alter the way they do business. He predicts that the need to be professionally competent will never be more acute.
“The federal government is ushering in the licensing changes this year, and SMSF advisers will have no choice but to adapt if they want to remain part of this growing industry,” he said. “Under the new regime, it will be critical for specialist advisers to attain an appropriate level of competence, regardless of which professional body they are affiliated with. That will be the key to success.”
Auditor standards
In preparation for the introduction of the new SMSF auditor regime, the regulator has released guidance to assist SMSF auditors register with ASIC and understand the new competency standards.
To audit an SMSF on or after July 1, 2013, advisers must be registered by ASIC as an “approved SMSF auditor”. Applicants can register for this designation from January 31, with transitional arrangements in place between this time and June 30.
“Auditors have to decide whether they wish to continue auditing SMSF funds and remain part of this rapidly changing industry,” said Colley. “If they are staying, then they will need to get their application to ASIC by April so they will be registered in time for the July 1 start date.
“As part of this registration process, they will need to audit at least 20 funds and meet certain educational requirements.”
Attention, accountants
Accountants who provide advice on SMSFs will need to decide whether they apply for a limited licence, which takes effect from July 1, or stay under the current system until 2016.
Government spokespeople have repeatedly predicted that up to 10,000 accountants could take up a new form of financial advice licence that will allow them to provide a broader range of advice on SMSFs than they do now.
“SPAA considers the limited licence is an excellent and practical compromise between the current exemption arrangements, that are highly restrictive, and the provision of fully licenced financial advice including the recommendation of financial products – something accountants do not wish to get involved with,” said Colley.
“As part of this change, financial planners who provide tax advice will need to meet education and experience requirements, satisfy a fitness and propriety test, and follow an approved code of conduct.”
