Thousands of accountants providing advice on the establishment of an SMSF face a potential compliance gap as changes to financial advice regulation come into effect after 30 June this year.
The expiry of the existing exemption means that accountants wishing to continue advising clients on their suitability to set up an SMSF will be required to hold an Australian Financial Services Licence (AFSL) from 1 July 2016. According to Adviser Network, the missing link has been an effective SMSF suitability tool that allows accountants operating under a limited AFSL to provide a compliant, personalised advice solution.
“While there has been extensive discussion on the new licencing framework, little thought has been given to how accounting practices will be able to set up the right business and compliance processes to continue advising their clients on SMSF suitability,” said Adviser Network CEO Duncan McPherson. “When it comes to self-managed super, many investors rely on their accountant as their trusted adviser. So licensed accountants need to be able to provide that advice in a way that is client-centric, compliant, and doesn’t require them to invest heavily in technology simply to advise on suitability.”
ADVISER NETWORK ADDS TO ACCOUNTANT ADVICE ARSENAL
Adviser Network has launched SMSFit, a new cloud-based solution that enables licensed accountants to carry out a preliminary assessment for investors considering a self-managed superannuation fund, as to the suitability of setting up a self-managed superannuation fund.
SMSFit assesses the client’s suitability for an SMSF based on a range of individual factors, from the client’s investment goals and financial situation, to their understanding of performance benchmarking and relevant regulatory issues. SMSFit then generates a limited Statement of Advice (SOA) that reflects the client’s attitude related to the appropriateness of self-managed super.
“SMSFit enables licensed accountants to maintain their role as a trusted partner to their clients,” said McPherson. “The new licensing regime requires accountants to get their head around a multitude of rules, and we want to ensure they have all the tools they need to develop the advice component of their business. Accountants who have formed strategic relationships with financial planners will be able to continue to refer their clients for rollover and comprehensive financial advice if they decide to proceed with an SMSF, after reviewing the limited advice provided by SMSFit, as to the suitability of a self- managed super fund for the clients.”
SMSFit is licensed by the accountant’s chosen AFSL provider. Registration involves an annual subscription fee of $99 with the cost of producing the results and a limited SOA being charged per limited SOA generation. This allows the licensed accountant to invoice their client based on the cost of the limited advice using SMSFit, along with their own fee, for further financial advice.
“We are absolutely dedicated to providing transparent and non-conflicted outcomes for clients,” said McPherson. “We have put a lot of resources into ensuring that SMSFit is totally objective, and that the advice it provides is based on the requirements of each client. With SMSFit, both the licensed accountant and the client know that the advice is fit for purpose and underpinned by experienced industry practitioners.”
