While the real outcomes of the end of the accountants’ exemption would not be known until much later, it was the end clients who would instantly feel the change via limitations in the relationship with their accountant, according to an industry executive.
“It’s going to be more of a change from a client point of view,” Royston Capital director Chris Boag told selfmanagedsuper.
“They will still go to their accountant as their central point of contact, but if the accountant says they can now give advice in relation to SMSFs under the new regulations, clients will take that on board.
“It will be around whether clients understand what their accountant can actually do now [from 1 July onwards] and making sure that’s clearly articulated, which I think is going to be the challenge.”
The challenge would be much more significant as clients and accountants started to move into comprehensive advice, Boag said.
“Clients will need to understand what the limitations of the advice are, if any,” he noted.
“Some accountants might be fully capable of providing all the advice.
“But it’s about the clients’ understanding at that point in time [post 30 June].”
He also said currently accountants were still adjusting and settling into the new licensing world.
“They are still learning where the line in the sand is,” he said.
“I think that will just take time.
“And while we hear that ASIC (Australian Securities and Investments Commission) is going to make an example out of the accountants, they are pretty savvy in these areas, and they know what the rules are and they’ll also make sure clients are aware of the rules.
“Most accountants are pretty switched on and are trying to do the right thing.”
Commenting on whether the significant superannuation proposals in the budget were a new or additional challenge for accountants now operating under a limited or full Australian financial services licence (AFSL), he said he did not believe that to be the case.
“I don’t think accountants who have applied for a licence are new to SMSFs,” he said.
“I think they’ve been dealing with SMSFs for a long time and they’re very experienced, so I don’t feel that the [super changes] are going to be an imposition.
“They’re used to dealing with changes to legislation as well; accountants are pretty well-versed on these matters.
“Super is always subject to change and legislation creates jobs and work, but you just don’t want it to have a significantly negative impact on clients and their overall wealth because at the end of the day they’re trying to save for their retirement so that they’re not a burden on the welfare system.”
Earlier this month, ASIC revealed 582 applications were still pending assessment and it expected delays with processing.
On 30 June, the transitional period for recognised accountants who provide SMSF-related financial advice ended.
From 1 July 2016, accountants intending to make recommendations to acquire or dispose of an interest in an SMSF must hold a limited or full AFSL, or become an authorised representative of an Australian financial services licensee.