Treasury’s review takes into consideration the “new approach to discipline” recommendations of the banking royal commission which cover regulation and registration. The review also takes into consideration incidences of regulatory duplication.
One of Treasury’s proposed models to improve the effectiveness of the regulatory environment includes restoring the accountants’ exemption and allowing financial advisers to provide incidental tax advice without being registered with the TPB.
“This option would bring back the accountants’ exemption and allow accountants to provide basic SMSF advice and services without having to operate in the AFSL environment,” Treasury’s discussion paper said.
The history of the accountants’ exemption
The accountants’ exemption acted as a carve-out for accountants providing basic SMSF advice services. It was phased out in 2016 to make way for the wildly unpopular limited licence, in a bid to push accountants into the AFSL environment for the provision of most SMSF advice services.
Despite ongoing calls to act from the regulators, professional bodies and dealer groups, there has been widespread dissatisfaction with and rejection of the limited licence regime since its inception. This is in spite of data suggesting accountants are keen to grow their SMSF client base.
As a result, for several years, dealer groups and consultants alike have told Accountants Daily and sister publication SMSF Adviser that the government has “every incentive” to kill off or significantly adjust the limited licence structure.
Most importantly, offices as high up as the ATO have acknowledged that the new licensing regime created a gap in the market. That is, a consumer need for basic advice services is not as well serviced by their chosen adviser: an accountant. Accountants are regularly cited as the preferred choice for advice related to SMSFs.
The latest lobbying efforts
Associations like the Institute of Public Accountants (IPA) took the issue to government prior to the federal election, and software companies like BGL launched a public protest, gathering support from practitioners and other service providers alike.
To date, the federal government has been publicly quiet on the issue, although Accountants Daily understands there is appetite to address the adverse outcomes Australians face as a result of their accountant struggling in the regulatory environment.
Treasury’s consultation period is open until 30 August. You can have your say here.