Accountants providing advice under a limited Australian financial services licence (AFSL) who are contemplating complying with the education requirements set out by the Financial Adviser Standards and Ethics Authority (FASEA) should consider whether their activities require them to be licensed, the head of an industry body has said.
Self-managed Independent Superannuation Funds Association managing director Michael Lorimer said the FASEA requirements are only applicable to practitioners working under any type of AFSL.
Therefore it would be prudent for accountants to revisit their service offerings for SMSF clients to determine if their activities are captured under the licensing regime to determine if they then need to fulfil FASEA’s education requirements to provide SMSF advice, Lorimer said.
“There are lots of things you can do as a practitioner without the need to have a licence quite safely,” he told selfmanagedsuper.
“If you’re providing information about how transfer balance caps operate and what contribution caps are and whether you’re eligible to claim the deduction, none of those sorts of matters need a licence of any sort because they’re factual.”
He also said practitioners who provide SMSF compliance services, prepare tax returns and financial statements, and arrange audits do not require a licence and did not rely on the accountant’s exemption.
“A lot of people who went down the limited licensing path will realise particularly in the FASEA context very shortly that they don’t really need to be here at all,” he noted.
“They can continue to do what they’re doing quite safely and don’t need to worry about this new education and advice framework, which is clearly focusing on those people who are providing personal financial product advice to retail consumers.”
Lorimer predicted a mass exodus of accountants from the limited licensing framework, but said that does not mean they will cease providing SMSF services.
He warned though that while answering questions around whether a client can access their super based on their age is factual information and does not require a licence, it could potentially cross the line into the realm of personal advice. As such, he suggested accountants should exercise caution in this grey area.