CPA Australia has warned accountants the favourable transitioning rules currently in place for the new licensing regime regarding financial advice for SMSF clients will expire on 1 July 2016 with significant resulting consequences.
“We’re not sure if you realise that if you don’t make a decision and have your [licensing] application in before 30 June 2016, you lose all the transition arrangements,” CPA Australia financial planning policy adviser Keddie Waller told delegates at the CPA SMSF Conference and Expo in Sydney last week.
“At the moment if you apply for a licence, you’re actually deemed to have the experience requirement and the normal experience requirement is three years as a licensed adviser over the past five years.”
Waller said it meant when the current arrangements expired, practitioners operating under the accountants’ exemption would be unable to fulfil the experience requirement, which in turn would not allow them to acquire a limited licence themselves and would result in them having to operate under another licensee.
In light of these circumstances, CPA Australia is encouraging accountants who have decided to become licensed to begin their mandatory training requirements immediately.
“The key message is if you know you want to be licensed in your own capacity to start your training because at least that gives you the option of taking advantage of the transition period,” Waller said.
She also observed that there continued to be some misunderstanding about how the licence application process worked.
“There have been about 100 applications and probably half of them have been withdrawn because members who have applied weren’t actually ready,” she said.
Most of the issues have been around education and she emphasised specific training was needed for the specific types of advice accountants wanted to provide.
“You need to make sure whatever areas of advice you want to provide that the authorisation is on the licence and you’ve got that training,” she said.
“So if you want to provide advice on superannuation and SMSFs and you don’t do the training, you won’t get it.”
She warned even if accountants had their licensing application in by 30 June 2016, but had not had it approved, they would be unable to provide any advice until the approval was received.