Don’t miss this opportunity

Keddie Waller

The countdown is on until 30 June 2016 when the accountants’ exemption will be repealed. However, with only four months to go, there still remains a high level of confusion about what is changing and what options are available to address the reform.

So let’s clarify some of the more common questions around the removal of the accountants’ exemption.

I currently prepare financial statements and tax advice for SMSF trustees. I have been told I will need to be licensed to provide this advice from 1 July?

Regulation 7.1.29A of the Corporations Regulations, commonly referred to as the accountants’ exemption, currently permits a recognised accountant to recommend if a client should establish or wind up an interest in an SMSF without being licensed under the Australian financial services (AFS) licensing regime. This is the regulation that will be repealed on 30 June.

If you want to provide this advice from 1 July, you will need to be appropriately licensed in some capacity.

Importantly, regulation 7.1.29 will continue to permit the provision of administration, compliance, audit or tax advice in respect of SMSFs and other financial products without requiring you to be licensed. However, you should carefully review this regulation to understand what advice and services can be provided, in what circumstances and what other requirements must also be met.

I want to become licensed as an authorised representative, but I don’t think I will finish my Regulatory Guide (RG) 146 training by 30 June. How will I meet the experience requirement to become licensed?

Meeting the experience requirement is only necessary if you are going to apply for your own limited AFS licence. If you are going to be licensed as an authorised representative, you must meet RG 146 training requirements, which will be set by your potential AFS licensee. If you are applying for a limited AFS licence, you will be deemed to meet the experience requirement if you are a professional accountant and hold a public practice certificate with one of the three professional accounting bodies. These streamlining provisions end on 30 June. From 1 July, if you do not meet the experience requirement, your only option to become licensed will be as an authorised representative. However, after you have accrued this experience, you then have the option to apply for your own AFS licence if you wish.

What training do I need to complete for the limited AFS licence?

There are two requirements. One is to meet the education requirements to be approved as a responsible manager, which the Australian Securities and Investments Commission will assess as part of the licence application. This means you must complete recognised training for each authorisation you are seeking. You must also have the required knowledge and skill to provide the advice and services under the limited AFS licence. As a responsible manager, this is your responsibility and you must also ensure that anyone authorised under the licence also meets this requirement.

Can I apply for a limited AFS licence before 30 June if I am still completing my training?

You cannot apply for the limited AFS licence until you have meet all of your requirements, including completing the relevant education and training. If you are unable to complete the relevant training before 30 June, you cannot apply for the limited AFS licence under the training provisions. Rather, if you need to be licensed, you will have to be licensed as an authorised representative of another AFS licensee once you complete your training. Importantly, you cannot recommend a client set up or wind up an interest in an SMSF until you are appropriately licensed.

I need a solution but don’t really want to provide product advice myself. What are my options?

If you need a solution for your practice, but do not necessarily want to provide the advice yourself, consider other alternatives such as recruiting a financial planner, setting up a joint venture with a financial planning practice or a referral arrangement.

Only a short time now remains before the accountants’ exemption will be repealed. If you have not commenced any training at this time, then you may have left it too late to consider applying for your own limited AFS licence. This does not mean you do not have options, however, it does means you need to implement another solution for your practice now.

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