Accountants failing to inform their clients of the new superannuation changes starting from 1 July 2017 could be breaching a duty of care and found to be professionally liable for a financial loss or penalty, according to a technical executive.
“The good news is that we have some certainty going forward so people can now think about the opportunities and the pitfalls, but the industry needs to be quick with understanding what the rules mean and build systems to cope with them,” Institute of Public Accountants (IPA) technical policy general manager Tony Greco told selfmanagedsuper.
“Now that there’s a window of opportunity for people to do something under the current rules, that’s really where advisers and licensed accountants need to think about in terms of consequences from these announced changes.
“But there’s bound to be unintended consequences that pop out because the government has rushed this as budget expediency dictated these events.”
One of the ramifications for accountants who were not licensed to give SMSF advice was that clients could later find themselves facing major complications with their fund and then accuse their accountant of failing to inform them of the new super rules in the first place.
“You might be found negligent if you’re not telling clients that these superannuation changes are coming and how it’s all going to impact them, so some accountants may not be doing anything,” Greco noted.
“There’s a twofold issue there: some accountants are not licensed and might be found negligent if you don’t contact their clients, then also they’re going to have to tell clients to go and talk to someone about it, but that can’t be considered financial advice.
“They’ll have to inform their clients that these changes may impact their SMSF and that they’ll need to talk to someone [who is licensed to discuss it further] as soon as possible.”
He said the IPA was unhappy with the consultation process for the super laws with the industry and also slammed the high complexity of the majority of the super changes.
“It’s a bit ironic that the definition of superannuation bill has been pushed into the new year. We’ve passed law, but the government [continues to reaffirm these changes for] simplicity,” he said.
“The changes are overlaying more complexity over the top of the current state of the super system, so it’s not satisfying that definition.
“So it’s ironic because everything should be measured against that definition of superannuation bill.”