A recent study found nearly 37 per cent of accountants intend to practice under the accountants’ exemption until it expires on 30 June 2016 and then see what happens before they make a decision on what to do next.
While this may be somewhat concerning, is it surprising? Probably not. Many of these accountants are busy running their own public practice and don’t have the time to read the many resources available.
Add to that the constant commentary in the media from the breadth of different stakeholders, all with the best interests of the accountant in mind of course, and this is becoming a confusing reform, proving difficult to navigate for a busy practitioner.
So it’s time to clarify some of the common misconceptions about the accountants’ exemption and the limited licence.
1. The low take-up of limited Australian financial services licences (AFSL) shows accountants are not interested in the limited AFSL.
This is one of the most common, yet false, comments made.
Given the vast majority of accountants would not have previously completed any financial planning training, it was never anticipated accountants would be applying for the limited licence so early in the transition period.
In fact, the accounting profession strongly advocated for a three-year transition period, knowing it would take our members at least two years to complete the necessary training and education to apply for the licence.
So the fact only 40 limited AFSLs have been approved to date is really a positive, not a negative.
What’s more, many accountants will continue to operate under the accountants’ exemption, even when they are in a position to apply for the limited licence, and will apply for the limited licence late in the transition period.
2. A limited licence will cost at least $20,000 to $30,000.
In fact, taking into account the broader opportunity and time costs, some say it will be as much as $100,000 annually.
What many of these comments fail to take into consideration is the support and resources that have already been made freely available for professional accountants in public practice. In fact, we have developed complimentary resources to help accountants apply for a limited licence, including a step-by-step guide, necessary templates and a draft compliance manual.
These resources have been developed to ensure there is no need to pay a compliance consultant to assist in the licence application process. In addition, ongoing support resources are already being developed.
Further, members in public practice are no strangers to compliance obligations, such as training and supervising staff or implementing risk management systems.
3. You must decide now if you want to apply for a limited licence.
This is untrue. The fact is accountants do not need to decide today if they want to apply for a limited licence.
However, they do need to decide if they will need to be licensed in some capacity. That is, if they want to continue to recommend the establishment or winding up of an SMSF to clients after 1 July 2016, then they will need to be licensed.
More importantly, if this is the case, they will need to start their training now or risk simply running out of time, which means the option of a limited licence will be lost.
4. The accounting profession wants accountants to apply for a limited licence.
The consistent objective of the accounting profession since the removal of the accountants’ exemption was announced has been to support our members, irrespective of the option they choose.
In addition to the resources for the limited licence, we have also produced a range of resources for those who choose not to become licensed, including a guide on what advice you can provide without being licensed. A comprehensive guide on the key considerations when choosing a licensee is also available for those members who are considering becoming an authorised representative.
With the halfway mark for this reform fast approaching, it is important accountants are fully informed and understand their options so they can make the right decision for themselves individually and for their practice.
So for those accountants out there still confused about the options and what this all means, now is the time to become informed and ask your professional body the questions you need answered.
