There has been a lot of discussion floating around about the 1 July changes for accountants regarding self-managed super funds (SMSFs) and licensing.
And, unless people have been sticking their heads in the ground, it’s pretty safe to say that most industry participants are aware of what’s happening or at least know that the playing field is changing. It’s probably also fair to say that most accountants know that if they plan to continue doing exactly what they can do now, they don’t have to do anything for a couple of years, but if they want to advise in SMSFs or discuss strategy with their clients, they either need to become licensed themselves or become an authorised representative (AR) of a dealer group.
Personally I don’t feel that getting your own Australian Financial Services Licensee (AFSL) is a bad idea, it certainly isn’t as cost prohibitive as some may think, however with a license comes the administrative and compliance responsibilities that most industry practitioners don’t want. So, for most accountants the preferred option will be gaining AR status with a dealer group.
Ok, so if the decision has been made to go down this path and seek to be an AR, what is available in the market in the way of dealer groups?
Realistically the market can be split into 3 main players; institutionally owned dealer groups, non-aligned large & mid-tier dealer groups and boutiques or independent dealer groups.
The hard part is knowing which dealer group falls into which category given that the large institutions have been buying many of what were once non-aligned large & mid-tier or independent operations. In fact most of the large institutions own more than one dealer group and maintain them separately to meet the different needs of different parts of the market. Some have even set up new operations designed purely to target the accountants SMSF specialist market.
The good thing is that all of these operations will appeal to someone.
There are many accountants that will want dealer groups that have the backing of the AMPs and MLC’s etc. to gain the benefits of their vast resources, wealth of knowledge and business support capabilities.
On the other hand the non- aligned large & mid-tier groups will appeal because the large institutions don’t own them, allowing accountants who wish to be seen as unaligned to the big fund managers or banks to provide services to their SMSF clients and still have access to various business and marketing resources.
Finally we have the boutique and independent dealers groups. These dealer groups will appeal to accountants who feel that joining a larger dealer will be viewed as giving up their independence or may place restrictions on how they operate their business.
Boutique AFS licensees typically have specialist areas of operation and when looking to choose a dealer group it makes sense to go with a group that has the specialist services that will meet and service your needs i.e. if you are a SMSF specialist who is looking to give their clients strategy and advice, choose a dealer group who specialises in SMSFs and can offer your business the technical and educational resources and support you need.
Whichever way you go, don’t just jump at the biggest or loudest, do a bit of research and see what style suits your business best and further, get to know the people you will be dealing with on a day to day basis. You will soon work out which style fits best.
