Accountants operating in the SMSF space need to state which side of the licensing regime they are operating under at the commencement of client discussions, a licensing expert has said.
“Whether you’re giving facts or advice, you need to make a conscious decision about which side you’re sitting on,” Licensing for Accountants founder Kath Bowler said during a joint webinar with Smarter SMSF held today.
In addition, accountants need to get the client to make a conscious decision, Bowler said.
“Time and again, accountants have a conversation and believe they’re on the side of giving only facts, but the client is seeking advice and therefore they believe they’re getting advice,” she noted.
“Unless you state it upfront that you’re giving facts and information or advice, there is always going to be that blur, and you also have a reference point in case [the conversation steers towards] clients trying to get advice out of you.
“Also, if you’re acting in an unlicensed capacity, you shouldn’t be filling in any grey areas because that indicates that they need advice.”
Smarter SMSF chief executive Aaron Dunn said if the conversation began as pure facts but started to delve into the licensed advice space, the accountant can then explain that type of instruction requires a completely different process.
Dunn also highlighted that using this process helps accountants build better client file notes.
“If it ever comes back at some point as to how this conversation was framed and the ship hits the sand, you’ve got a file note or record of information in terms of those conversations,” he said.
“Because if you don’t, then turns into a ‘he said/she said’ issue, where we know which side of the fence the courts would sit on.”
During the webinar, a poll revealed 74 per cent of participants were unlicensed, while 20 per cent were a licensed authorised representative.
Of those unlicensed accountants, when asked if not having a licence was inhibiting the engagement they have with their SMSF client, 52 per cent indicated they were somewhat affected and try to stick to factual information.
This was followed by 21 per cent of unlicensed accountants stating they are restricted in what they can tell their clients, with 8 per cent saying they only provide tax advice to their SMSF clients.
