FOFA drove accountants away from SMSF set-up

The Financial Adviser Standards and Ethics Authority new education standards will not have a significant impact on accountants advising on the establishment of SMSFs as many have already stepped away from this task following the introduction of the Future of Financial Advice (FOFA) reforms, according to an accounting body.

Institute of Public Accountants advocacy and technical executive general manager Vicki Stylianou told selfmanagedsuper accountants are focusing more on providing administration and tax services for SMSFs.

“So it’s kind of like the trend has already been happening through FOFA. Some accountants have totally gone out of that space of advising on the establishment and winding up of an SMSF, so that’s been playing out for a while now,” Stylianou said.

She noted some business models offer a combination of services, including advising on the establishment of an SMSF, administration services and auditing services, and these will usually be separate from the advice piece.

“Most accountants have already factored into their practice what exactly they’re going to be advising on or not advising on,” she said.

“This is very mindful of where to draw the line, what they can and cannot say, so not being able to advise on whether or not a client should set up an SMSF in the first place.

“So if they’re not authorised or licensed, then they don’t go there anyway.”
People who want to establish an SMSF will most likely seek advice from a financial planner and then work in tandem with an accountant, she added.

She also warned while higher education standards and the code of ethics for advisers will be positive for the industry, they should not result in financial advice becoming even more expensive and unaffordable for consumers.

“It’s great to have this quality advice, but it also has to be acceptable and affordable. I think it’s incumbent upon all of us to make sure that’s the case,” she said.

“We go back to the policy objectives of FOFA and we must always be cognisant of that.”

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