With just over two years until the accountants’ exemption is officially removed, accountants could be forgiven for thinking they have plenty of time to respond.
However, there are a number of factors which bring the real deadline for action much earlier than 30 June 2016. Here are the five most essential considerations for accountants moving into advice:
1. Does advice align with your business growth strategy?
Accounting firms wanting to ensure that they maximise their business growth potential will need to give thoughtful consideration to how they best service their SMSF clients going forward. In doing so, it will be important to take the time to think about this in the context of your overall business strategy and develop a response that will ensure continued success.
2. How will the industry react to an influx of advisers?
Capacity constraints within the industry will also bring the deadline forward. All accountants wishing to continue to provide SMSF advice after the accountants’ licensing exemption is removed will need to become an Authorised Representative of a licensee – either a third party licensee or under their own licence. As a result, we will see an unprecedented number of new entrants into the financial advice industry as thousands of accountants come under the ASIC regulatory regime.
While the majority of accountants may want to get authorised as close as possible to 30 June 2016, this will not be possible. The industry will not have capacity to deal with a scenario where all new entrants attempt to seek authorisation and complete the related requirements in the final few months leading up to the removal of the exemption.
3. What qualifications will I require?
In order to become an Authorised Representative, accountants will need to (at a minimum) undertake training that meets the requirements of ASIC Regulatory Guide 146 (RG 146). With limited training providers in the industry, there will be constraints in regard to the number of spots available in relevant courses as we get closer to 30 June 2016, when demand will undoubtedly increase.
In addition to RG 146 training, there are a number of other requirements that need to be met before an individual can be appointed as an Authorised Representative. Depending on the licensee, these can include reference checking, police checks, licensee specific orientation training etc.
4. Which licensee will I select?
There is a real risk that licensees start to turn accountants away as the 30 June 2016 deadline looms. This could result from limitations in their ability to on-board large numbers of new Authorised Representatives in a short space of time, or simply due to the licensee reaching its desired number of Authorised Representatives.
5. Is self-licensing a viable option?
If a firm is considering self-licensing rather than having individuals authorised through a third party licensee, there is even more lead time required. This includes the time required to develop internal policies and procedures, appoint Responsible Managers (as well as Authorised Representatives), ensuring appropriate professional indemnity insurance is in place, and becoming a member of an external dispute resolution scheme.
Accounting firms should be starting to think now about their future business strategy and determine their time line for action.
For firms who decide that the removal of the exemption is the ideal catalyst to begin providing comprehensive financial advice to their clients, they can start this journey now. The sooner an accounting firm starts to deliver these higher value added services to their clients, the earlier they will experience an additional revenue stream, ‘stickier’ clients and a strong foundation for future growth.
David Lane is the chief executive of Count Financial Limited.
