AMP’s ‘SMSF Advice’ has released a report debunking 'commonly held views' by accountants on their licensing options in preparation for the end of the accountants’ exemption in 2016.
AMP debunks myths on licensing
The report, To licence or not: The real cost of your decisions, suggests accountants are underestimating the true costs of establishing and maintaining a limited Australian Financial Services Licence (AFSL).
“Accountants can expect to pay from $20,000 to $34,000 for self-licensing, compared to $15,000 to $20,000 for becoming an authorised representative,” an AMP statement said.
“Most accountants view the $1,485 ASIC application fee as their only up-front licensing cost, but in reality, licensing set-up can cost accountants about $11,500, more than eight times what most accountants expect”.
AMP’s head of SMSF Advice Stuart Abley said it is crucial for accountants to have an accurate understanding of the licensing options available and the implications of each.
“After speaking with over 500 accountants about licensing we know that the big areas of confusion for accountants are around cost and timing,” Mr Abley said.
“The question of licensing for accountants is about how, and not when - the time to act is now”.
According to the AMP statement, many accountants are unaware they should begin business preparations at least a year in advance if they are planning on acting under a limited licence when the accountant’s exemption is removed.
AMP spoke with more than 500 accountants across Australia and has issued six key insights for accountants regarding licensing:
• Not all licensing costs are being considered.
• Accountants need to look beyond financial costs and consider the non-financial, ongoing costs
• The type and scope of SMSF advice that accountants can give under the licensing options varies
• Accountants are unsure about how to incorporate ‘advice’ into their business structure
• Many accountants are concerned they may be providing advice beyond the SMSF accounting exemption.
• If accountants want to obtain a limited licence and begin offering advice by July 2016, they need to be taking active steps during 2014