It is often said that with change comes opportunity. The challenging environment of substantial and swift regulatory change is likely to bring significant opportunity for the accounting and financial planning professions as the two industries converge.
The removal of the accountants’ licensing regime and the introduction of a limited licence for accountants means, that over the next three years a large number of accountants will move into the regulated financial advice sector.
Now is the time for accountants to assess their current business model and determine how best to use the reforms as an opportunity to grow their business and enhance their service offering to their clients.
Even prior to the release of the final regulations, accountants were being offered different forms of limited licensing solutions. With the final regulations on the limited licensing regime and the transitional arrangements now released, accountants are now able to make an informed decision about their options.
Essentially, the limited licensing regime contemplates accountants or accounting practices applying to ASIC for an Australian Financial Services Licence (AFSL). Accountants considering applying for their own licence must understand the significant upfront and ongoing costs associated with obtaining and maintaining an AFSL (even a limited one). This is especially important in light of the fact that the licence will be limited to class of financial product advice
In addition to the resources required to ensure you maintain your ongoing obligations under an AFSL, the training requirements are essentially doubled.
That is, the accountants in the practice responsible for the licence must be appointed ‘responsible managers’ and undertake training to demonstrate competency under ASIC regulatory guide 105 (RG 105). If those accountants are also the people providing the SMSF advice to clients, they will need to undertake additional training in line with ASIC’s regulatory guide 146 (RG146).
The other option for accountants is to look to an existing AFSL holder (dealer group) to obtain authorisation. Some AFSL holders are offering a limited form of authorisation in line with what is covered under the limited licence – that is, class of product advice. Others may allow accountants to be authorised to simply do what they can currently do under the accountants’ exemption. Under either of these options, RG 146 training requirements will need to be met.
While the above solutions may appeal to some accountants, those wishing to seize the opportunity that this change presents may wish to obtain a full authorisation from an existing AFSL. This option would allow accountants to not only provide their current SMSF services to their accounting clients, but enhance and broaden the services that they provide to their clients, beyond SMSFs to full financial advice.
The training requirements under RG 146 will not be significantly higher than a limited authorisation, and when considered against the benefits for your clients and your business, are likely to be well worth the effort.
As the CEO of Count Financial, David is responsible for the strategic growth and financial performance of Count. He is a Member of the Board and Director of Count subsidiaries.
