Accountants and licensing. Where do we start? Over the past 15 years, I’ve worked closely with accountants who have transitioned into financial services. And now, with the new regulations, the space is even more complex.
Most accountants know there is a July 2016 deadline looming, but don’t really understand what that means, and what they have to do now. Over the coming months, my series of articles will debunk licensing myths to help accountants understand the right licensing journey for them. And it is a journey. Keep in mind there are various options available – the key is finding a good fit for you, your business and your clients.
Let’s start with four key points all accountants need to understand:
1 Only one exemption
Only one exemption has been removed, which leaves three remaining.
The only exemption that is being removed is the one that allows accountants to recommend the establishment and closing down of SMSFs without needing to be licensed under an AFS licence.
2 Different levels of licensing
Not all licensing is the same.
To add to the confusion, licensees who have a full licence can “slice and dice” their authorities however they wish. Hence, there are a wide range of licensing options in the marketplace, all allowing slight variations – making it difficult for accountants to compare like with like.
3 Training requirements vary
Depending on the level of licensing you choose, training requirements will vary.
Initial training requirements are directly linked to the level of licensing you select.
Before any advice can be provided, you will need to demonstrate that you have met these training requirements. In most instances, this training should have been completed in the past five years, unless you have been actively advising as an authorised representative.
4 Make the overriding decision first
Don’t make a decision about self-licensing versus becoming an authorised representative until you have first made the overriding decision about licensing.
Almost every accountant I speak to is grappling with whether to obtain a limited licence or not. This is not the place to start, so it’s no wonder so many accountants are confused. You need to look at whether or not you need licensing at all, regardless of whether it is via a limited licence or by becoming an authorised representative.
The deadline is looming, so keep these points in mind and start your licensing journey now.
This is an edited version of an article that appears in the February 2015 edition of Professional Planner. Contact Alex Turnbull to subscribe, at no cost, to Professional Planner. Visit the Licensing For Accountants website for more information on licensing options, including a unique starter kit for accounting firms.
