Accountants looking to operate under the new licensing regime under the Future of Financial Advice reforms are favouring the middle-ground option that allows the provision of strategic SMSF advice to clients, according to AMP’s specialist licensee business, SMSF Advice.
The transition period for accountants commenced on 1 July 2013 and ends on 30 June 2016, where accountants providing advice on SMSFs will need an Australian financial services licence (AFSL) or to be an authorised representative of an AFSL holder.
SMSF Advice offers essential, strategic and holistic licensing options for accountants.
“The most popular option chosen by accountants is our strategic advice offer, which allows them to have strategic SMSF advice conversations with their clients,” SMSF Advice head Stuart Abley told selfmanagedsuper.
“The essential option is where they can just provide basic advice on SMSFs and just open and close SMSFs, which is like the continuation of the accounting exemption that they’ve always had.
“The third option is a full comprehensive financial planning licence.”
Beyond 30 June 2016, he said he believed the strategic advice option would remain the most prominent licence among accountants.
“It’s hard to put a figure on it, but we feel that definitely the majority of accountants will be attracted to that strategic option,” he said.
“There will be some that are attracted to the comprehensive licence, but the issue there with accountants is that they need to have the resources to take that on, in terms of having a full financial advice offering.
“It’s probably more relevant to accounting firms that have those resources in place.”
He said the accountants SMSF Advice had been in discussions with were already servicing SMSF clients, with about 50 SMSF clients on average.
Momentum was growing around accountants considering the options for their business, he said.
“With two years to go [until 2016], we’ve found accountants are starting to make a more proactive effort now about finding out about their options, particularly over the last six months,” he said.
“Accountants are mainly concerned with the cost and support that they’re going to get.
“The other concern in the financial services industry is understanding what their actual needs are and that they’re not getting product being flogged to them, and we deal with that up front … because our offer is not about that.”
He said there was a lack of professional accountancy-specific support in the market.
“Our offering has been put together by researching accountants and also designed by accountants, so we believe we’re a market leader in understanding accountants,” he said.
