Accountants wishing to continue to advise on SMSFs will bear the brunt of the new education standards as much as financial planners, but this is flying under the radar, an industry executive has warned.
Licensing for Accountants chief executive Kath Bowler said the initial standards released by the Financial Adviser Standards and Ethics Authority for licensed advisers made no distinction between whether they only applied to limited authorisation or full authorisation.
Bowler said the new education standards would apply to accountants who had obtained a limited licence or opted to become authorised representatives of other licensees in order to continue advising on SMSFs following the scrapping of the accountants’ exemption in July 2016.
“I think of all the changes that have happened in the last few years, education is going to be as big, if not bigger, than the licensing changes for them,” she told selfmanagedsuper.
“And remember, thousands of them already went back and did additional study to meet the 1 July 2016 requirements. And it appears that they will now be told that study is not enough, they may now need to do more. It’s not 100 per cent clear what that more is.
“It was a struggle to get them to do that study so that’s why I’m saying to then turn around and say you may need to do more study potentially is going to be the straw that breaks the camel’s back.”
While there might only be around 800 limited licence holders, there were often many accountants providing advice under those licences, in addition to thousands that had opted to become authorised representatives, she pointed out.
She also labelled 2018 a “make or break year” for many accountants who had either chosen to obtain limited licences, become authorised representatives or not obtain licences at all. She noted many licensees were no longer offering accountants the choice to become authorised representatives as they were finding it difficult and challenging.
“The tables have turned a little bit in that a couple of years ago the accountants were in the driver’s seat and had a lot of choice and options. That’s not the case now,” she said.
The requirement for accountants to have three years’ experience in advising on SMSFs within a licensing regime means they would have to wait until July 2019 to become eligible if they began practising as authorised representatives from July 2016.
“The limited licence is pretty much in hibernation because you need to have that three years’ experience to be able to get that limited licence now.”