Accountants coming around to licensing

The latest research into accountants servicing SMSF clients has shown an increasing number of practitioners currently falling into line with the new licensing regime, with even more intending to operate under an Australian financial services licence (AFSL) in the coming years.

An Investment Trends study revealed there are 4000 accountants with their own AFSL in 2016 compared to 3000 practitioners who took this course of action in 2015.

In addition, 1500 accountants are operating under a limited AFSL in 2016, up from 500 professionals in this group last year.

And the survey showed the number of licensed accountants was expected to grow in the immediate future.

“There is quite a large number [of accountants] either intending to be operating under a full licence soon or opting for a limited licence,” Investment Trends head of wealth management research Recep Peker told the Chartered Accountants Australia and New Zealand 2016 National SMSF Conference in Melbourne yesterday.

“So [there are] 3500 looking to get the full licence and then close to 10,000 saying they’ll get the limited licence.”

Further, the research showed the majority of accountants looking to secure a limited AFSL were intending to provide services beyond those involving SMSF establishment and wind-ups, contributions and withdrawals.

“Only one in five accountants who indicated they want a limited licence just want to advise the clients on these [items],” Peker said.

“The rest also intend to provide advice on borrowing within SMSFs, SMSF investment strategies, estate planning and so on.

“So [they’ll have] a lot more involvement in the investment piece.”

In regard to the types of investment products accountants are likely to recommend to their clients, annuities and other longevity protection products ranked first.

The advisory services accountants intending to be licensed said what they were looking to provide fell into line with another of Investment Trends’ findings that respondents thought a larger proportion of their SMSF revenue would be generated from those activities over the next three years.

The report showed traditional services such as those covering accounting, tax and compliance currently generated 82 per cent of SMSF revenue for the average accountant.

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