Accounting, Financial Planning, Regulation

Licensing reform should span all SMSF advice

licensing reform SMSF advice

Any potential changes made in an effort to reform the licensing framework should apply to everyone in the SMSF advice space, not just accountants, an accountant licensing expert says.

Any improvements or reform to the licensing framework should apply not just to accountants, but to everyone in the SMSF advice space, an accountant licensing expert has said.

Holley Nethercote general manager Kath Bowler said the point of the licensing regime was to create a level playing field and any potential changes made in an effort to reform it should apply to financial planners as well as accountants.

“I think some things could be done that would significantly help accountants, but I don’t see why they shouldn’t equally apply to anyone else operating in the space,” Bowler said during the recent Chartered Accountants Australia and New Zealand National SMSF Conference Online 2020.

In addition, she said it was essential that when accountants took on the provision of SMSF advice, it was acknowledged as an extension of their tax and accounting services, rather than a replacement.

“Some of the exemptions that accountants have are ridiculous in that once you’re licensed, then the exemption no longer applies, which is just crazy – you extend your business and offer the advice, but not everybody wants or needs advice, so the fact that they can’t give compliance services in some instances is ridiculous. I think there needs to be an acknowledgement that it’s an extension,” she explained.

Bowler also pointed out the relief measures implemented in response to the COVID-19 pandemic, including registered tax agents being permitted to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services licence, had been a welcome reminder that licensing should not be necessary for simple pieces of advice.

“It seemed to be the first step in acknowledging a framework which could operate for simple pieces of advice,” she added.

In September, Bowler said SMSF accountants needed to keep an eye on what information they provided to clients seeking investment strategy assistance following the COVID-19 market downturn and, for their best interest, should be willing to recommend they seek personal advice.

Last year, two major financial advice bodies joined high-level discussions with the accounting associations to reform the licensing regime for SMSF-related financial advice.

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