Up to 10,000 suburban accountants will look to up-skill or partner with financial planners in order to provide full-blown advice on self-managed superannuation in the lead-up to July 1, 2016, when the accountants’ exemption is removed, according to David Lane, chief executive of CBA-owned Count Financial.
In his speech at the Financial Services Council conference last week, Lane said the new requirement on accountants to gain a limited Australian Financial Services license to provide advice on the establishment of SMSFs presented the “single biggest potential opportunity for growth” the financial planning industry had seen for many years.
“There are 10,000 suburban accounting firms in Australia, and let’s say half of them are not of a significant size to do much, that still leaves 5000 firms that could offer advice on SMSFs. That’s potentially 5000 new entrants, assuming two accountants in each firm go into financial planning,” he said.
“The removal of the accountants’ exemption will be a major tipping point because in the past accountants have been conservative and said, no, they didn’t want to get into holistic advice, but now they will need to decide if they want to provide holistic advice or basic advice about setting up an SMSF.”
Last year Minister Bill Shorten’s office said it expected to see up to 10,000 accountants become licensed under the limited AFSL and thus able to provide a much broader range of financial advice than they were previously able to.
Lane said Count was actively pursuing accountants to join the dealer group but was taking a different approach to competitors such as the National Tax and Accountants’ Association (NTAA), which was using scare tactics to push accountants to join them.
“As a rule, it’s not a good thing to push someone down to pull yourself up, and the NTAA is trying to sell the limited license. But the more accountants think about it, the more they’ll realise that (under a limited licensing arrangement) they’ll do 90 per cent of the work and only get 10 per cent of the benefit,” Lane said.
Reflecting on the first month under the Future of Financial Advice regime, Lane said there was still a lot of work to do concerning fee-disclosure statements.
“Getting the FDS to work practically is challenging and the industry is still grappling with it. There is a huge amount of red tape and compliance,” he said.
“Full-blown advice” on something that can be considered the “meat on the plate”.
Clients want someone who don’t just talk about the meat on the plate, they want an adviser who helps them plan the whole dinner party…and any accountant that thinks they can do the whole dinner party and also keep up to date with all the tax and compliance rules…..good luck.