The Institute of Public Accountants (IPA) is set to meet with the federal government about the possible reinstatement of the accountants’ exemption, armed with support from members who find the current licensing environment counterproductive to best practice with SMSF advice.
However, not all are convinced that a full reinstatement would be a positive step for the industry, with fears that it will see a return of accountants blindly recommending SMSFs to clients.
Speaking to Accountants Daily, Skeggs Goldstein Wealth partner, Adam Goldstein said no adviser should be permitted to advise on SMSFs without completion of specialist accreditation, and that RG146 holders should not have automatic authority to advise in the area.
“The same is true for the proposed re-implementation of the accountants’ exemption. In the absence of any specialist accreditation, an automatic authority should not be inferred on anyone to provide SMSF advice just because one is a recognised accountant,” said Mr Goldstein.
“The exemption was removed in 2016 leaving a limited/full license as the only option to advise in SMSF – admittedly, this has been complicated by proposed FASEA education requirements and I agree a resolution is required, but a simple blanket reinstatement of the exemption is not the answer.”
“I fail to see how exempting one part of the advice community from any standards will enhance the advice outcomes for clients,” he added.
“Accountants and planners must desist trying to be all things to all people, we must concentrate on our areas of expertise, obtain the appropriate qualifications and specialisations to advise – anything less in my view is taking us back to 2005.”
Further, Reece Agland & Associates principal Reece Agland said that while the current licensing regime continues to be an issue for the profession, a clear cut reinstatement to the exemption is not the solution.
“There needs to be a change but not a return. [There needs to be] a simpler licensing/registration system, appropriate education but not necessarily post graduate, appropriate CPE and enforced standard of ethics, and professional review of percentage of advice regarding SMSF clients,” said Mr Agland on a LinkedIn post.
“The big part is getting the registration process right more like TPB [rather] than ASIC with proper power and resources to review work.”
BGL managing director Ron Lesh sits on the other side of the fence, believing that the current regime is “unworkable” and is in the process of preparing to lobby government to reintroduce the accountants’ exemption.
“I agree we do not want shonky accountants recommending SMSFs – in fact giving any advice to clients,” said Mr Lesh.
“But I also do not want commission-driven sales people from vertically integrated businesses that know little about a client’s affairs, many with little or no financial knowledge or experience, giving shonky advice. I would, therefore, rather take the accountant who must have a professional qualification any day.
“Accountants are the most trusted advisors. Time to put them back in the game.”
The government’s take
The federal government continues to back the limited licence regime as one that acts to protect consumers, but is open to feedback from the accounting and advice community.
“The government is committed to consumers having access to high-quality financial advice. The limited AFS licensing regime ensures that accountants are appropriately licenced with ASIC and provides greater protection for consumers of financial services,” the Office of former minister for Revenue and Financial Services, Kelly O’Dwyer, said last week in a statement to Accountants Daily.
“The government will continue to engage with all stakeholders to ensure the financial services regulatory framework is achieving its objectives,” the statement said.
Prior to the limited licensing regime, accountants were granted licensing exemptions not afforded to financial planners for the same advice, which was an ongoing point of contention.
In this respect, Ms O’Dwyer’s office backed the regime again on the basis of fairness.
“It provides for a level playing field between accountants and financial planners giving SMSF advice,” the statement said.
Editor’s note: Ms O’Dwyer’s office issued its statement prior to the cabinet reshuffle on the weekend. Ms O’Dwyer is now Minister for Jobs, Industrial Relations and Women.