Accounting firm Count Financial has begun preparing for potential capacity constraints that will be faced by the industry as the deadline for SMSF accountants to become licensed draws closer.
Of particular concern to Count is the preparation accountants will need to undertake, such as training, before they can successfully operate as an authorised representative (AR) of an existing Australian financial services licence (AFSL) holder.
“We been reserving [training] places at Kaplan for people coming to Count just to make sure that we’re going to have some capacity,” Count chief executive David Lane told selfmanagedsuper.
“I don’t think it will be enough capacity, but it will do something and in particular we know we have to support our existing members in regard to them bringing new ARs in.
“So we felt that was important.”
Lane said he feared there would be a number of accounting firms in the industry that would be looking to provide licensing for their practitioners, but would be unable to do so because they started the process far too late.
To put perspective around the potential magnitude of the situation, he made a comparison to average new licensing activities of financial planners.
“I don’t think that it’s a bad estimate to assume 1000 new advisers enter the market each year,” he said.
“So the market is set up to deal with that. The educational providers can take 1000 new ARs through the process.
“All of the AFSLs can deal with changing licensees and maybe 1000 new ARs and that’s over the course of a year.
“If 5000 people show up in June 2016, in one month not a year, you’re talking about five times the amount of annual people showing up in one month. It’ll take some time to work that through the system.”
He added industry research had already revealed accountants who were slow to move on the issue could significantly damage the competitive nature and effectiveness of their practices.
“The number one reason, according to Investment Trends, clients leave an accounting firm is because they don’t provide enough services,” he said.
“And if you don’t provide financial advice in the future, you’re going to be at a disadvantage to your peers because your clients want it, your competitors will have it, and it will be a shame if come July 2016 you’re not in a position to provide it.”
