Accounting, Financial Planning

Support exists for accountants’ exemption rebirth

Accountants could play a role in satisfying the current unmet financial advice needs of Australians if an “extended accountants’ exemption” was introduced, according to a major accounting body.

Accountants could play a role in satisfying the current unmet financial advice needs of Australians if an “extended accountants’ exemption” was introduced.

The Institute of Public Accountants (IPA) has called for an “extended accountants’ exemption” to allow accountants to play a meaningful role in meeting the unmet advice needs of Australians.

The push from the accounting body comes from its opinion that the Future of Financial Advice reforms have denied the opportunity for Australians to receive appropriate and affordable financial advice as they approach retirement.

“The Productivity Commission observed that 48 per cent of Australian adults indicated having unmet financial advice needs. So, obviously there is an advice gap in Australia which needs to be addressed,” IPA chief executive Andrew Conway said.

“The IPA has developed a revised financial services licensing regime for accountants, which recognises their existing qualifications and experience.

“Our members are answerable to high levels of professional and ethical standards, subject to ongoing quality assurance evaluations and must maintain currency of knowledge through committed and continuous professional development and training.”

Conway said implementing a licensing arrangement that would allow accountants to have more meaningful conversations with their clients would improve the current situation.

“We believe it is the right time to introduce a new, extended accountants’ exemption,” he said.

The IPA’s position has been echoed by the Tax Institute in its submission to Treasury’s review of the Tax Practitioners Board (TPB), which recommended the reintroduction of an accountants’ exemption that was restricted to a range of activities related only to SMSFs.

Under this exemption, accountants would still be unable to provide advice about establishing a new SMSF and would need to hold an Australian financial services licence to do so, but they would be able to provide advice on making a contribution and structuring arrangements to make a contribution, receive a pension or exit an SMSF.

Accountants would also be able to recommend the winding up of an SMSF where a member’s balance was insufficient to keep the fund going and the member takes the remaining balance as a lump sum or pension, as well as provide advice on commencing an income stream and taking a lump sum from a fund.

“Any registered tax agent who does not have sufficient education and experience in this area with respect to SMSFs would still be expected to refer the matter to another professional with the relevant expertise,” the Tax Institute submission stated.

Treasury also suggested reviving the accountants’ exemption last month when it released its discussion paper for the TPB review where it put forward the option of allow tax advisers/accountants to provide incidental financial advice while allowing financial planners to provide tax advice without being registered with the TPB.

The calls from the IPA and Tax Institute run counter to recommendations from Chartered Accountants Australia and New Zealand and CPA Australia that the exemption should not be introduced as it was too limited in scope and the provision of taxation advice should be part of a wider review that considers the raft of changes that have taken place in the financial services sector.

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