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Accountants name SOA as top struggle

Accountants authorised to provide financial advice to the SMSF market have revealed producing statements of advice (SOA) was their biggest challenge, according to industry research.

The “2017 Vanguard/Investment Trends Self-Managed Super Fund Reports” surveyed both licensed and unlicensed accountants, revealing their biggest challenges in servicing the SMSF market.

“For those accountants who are not authorised representatives, the changes to the licensing regime, the restrictions on providing financial planning advice, regulatory uncertainty and educating clients are what holds them back,” Investment Trends head of wealth management research Recep Peker said.

“But for those accountants who are authorised, what came through is that the grass isn’t necessarily greener on the other side.

“[Their biggest challenges are] justifying charging the clients for an SOA and the compliance burden when producing an SOA, which are the same challenges for financial planners.

“Because it turns out that financial planners actually do have to work hard to provide advice – they’re not just creating a thousand SOAs in a day as there are a lot of compliance burdens and challenges.”

The research also found SMSF accountants who currently operate under a full Australian financial services licence (AFSL) took on average 6.8 hours to produce an SOA for a typical SMSF client.

When it came to financial planners, they took 6.3 hours on average.

“If you look at how much time accountants take to produce an SOA compared to the average time it takes a financial planner, it’s very similar, given where technology and the tools are right now,” Peker said.

“So what’s happening is more accountants are recognising this – if you ask them about their licensing intentions, the proportion of accountants who currently operate under an AFSL, full or limited, has increased only slightly over the last year.

“Then the proportion who said they intend to get a licence has come down and more accountants say that they intend to maintain the status quo.”

He noted that when those who intended to maintain the status quo were questioned about their barriers, they revealed they preferred to partner with someone in order to provide financial advice.

“This is where we’ve seen the continued rise of the multi-disciplinary practice,” he said.

“More accountants and more financial planners are reporting that they have in-house relationships.”

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