Is your accountant licensed to provide SMSF advice

New legislation will limit the advice unlicensed accountants can provide around Self-Managed Super Funds (SMSFs).

Introduced 12 years ago, an Australian Financial Services Licence (AFSL) must be held by providers of financial advice.  With the AFSL comes a raft of obligations designed to protect the interests of investors.   Accountants with a practising certificate from one of the key industry bodies have traditionally been exempt from holding an AFSL when providing certain superannuation advice including recommendations on the establishment or wind up of SMSFs.

Fast forward to present day and this exemption is being repealed.  From 1 July 2016, it will be a criminal offence for accountants without an AFSL or limited AFSL to provide advice of various aspects of managing an SMSF.  Essentially, unlicensed accountants will be limited to providing compliance and factual tax advice on SMSFs.

While this has far reaching ramifications for the accounting industry; it’s also important, that you as a consumer of financial advice, are aware of the changes and how they will affect the advice you receive.  Ensuring that you obtain the most appropriate advice begins with asking if your accountant is licensed and understanding the scope of advice they can provide.

What SMSF advice can an unlicensed accountant provide?

Under the legislative changes, unlicensed accountants are limited to providing factual information about superannuation including an explanation of the tax implications of making contributions and the contribution limits.

If your accountant does not hold an AFSL or have arrangements in place to ensure you receive comprehensive advice, the scope of advice you receive may be severely limited.  Any financial advice, should take into account both your business and personal circumstances to ensure you are in the best position to fulfil your financial and lifestyle goals.

From 1 July 2016, accountants that do not hold an AFSL will be not be able to:

  • Recommend that you set up an SMSF
  • Provide advice as to the performance or cost of different superfunds or structures
  • Recommend that you make contributions to a superfund or redirect existing contributions or assets to a superfund
  • Provide advice around property investment through your SMSF
  • Prepare an investment strategy

How is the industry reacting?

While the Government has provided a long transitionary period (the repeal of the exemption was first announced in 2014), few accountants have made the made the application for an AFSL or limited ASFL*

The recent 2016 SMSF Accountants Report released by Investment Trends reveals that only 1,000 accountants have successfully got their licensing arrangements in place over the last 12 months.  This leaves over 12,500 accountants unlicensed.  Consequently ASIC expects a large volume of last minute applications.

For many accountants, this will be the first time they’ve come under the scope of the ASFL’s stringent compliance regime.  Suddenly faced with preparing a Statement of Advice (SOA) or Record of Advice (ROA), those new to the regime will likely lack the processes and experience to execute this efficiently or effectively.

In our experience, there’s a difference between providing the bare minimum required to hold an AFSL, and having the experience and capacity to assist you in preparing for your future.

In Sydney, Melbourne and Adelaide, William Buck has a full AFSL and a long established team of qualified wealth advisors in-house to provide a fully integrated approach to our client’s financial needs.  In Brisbane and Perth, William Buck has formed strong partnerships with qualified and reputable wealth advisors, ensuring our clients in these regions receive the full scope of financial advice required for a successful outcome.

There is no short-cut to wealth creation nor superannuation planning, but getting the right advice is the best place to start.

*A limited AFSL limits the financial advice an individual may provide to advice on the establishment or disposal of an SMSF and strategic class of product advice (not specific investment advice).