As groups of financial planners increase their self-licensing push, as evidenced by a recent survey published by our sister publication ifa, accountants are doing the stark opposite.
Speaking to Accountants Daily, Licensing for Accountants chief executive Kath Bowler said she’s in fact seeing a move away from the self-licensed option in her client base, and more broadly in the market of accountants seeking licensing options.
Speaking anecdotally, Ms Bowler believes less than about 10 per cent of the accountants she’s dealt with are satisfied with their licensing option.
Further, she’s seeing significant evidence of accountants switching licensees, because they’re finding the offering they locked down to make the July 2016 deadline hasn’t been working for them.
“The templates aren’t what they want, the compliance to get statements of advice approved is too onerous and blows out the cost of their advice. Also, there hasn’t been sufficient induction support for accountants to know what to do when they give the advice,” she said.
“We’ve had people done with licensing and then moving back and forth, and they’re quite overwhelmed by the process,” she said.
Accountants are finding that dealer groups and licensees are not in tune with accountants’ way of working and thinking.
“They are either nervous of ASIC’s interpretation and taking it very seriously and being conservative to the point of unworkable, or they’re just not giving the right amount of support to their authorised representatives,” Ms Bowler said.
Ms Bowler said she “can’t see” how accountants will be able to continue in this space without a licensing solution in place, but equally believes there will be changes to the way ASIC handles it moving forward, given it has so far not been hugely successful or a clean process for the corporate regulator and accountants.
Also speaking to Accountants Daily, and echoing the sentiments of Mayflower Consulting’s managing director Sarah Penn, director at Merit Wealth David Moss said he thinks the limited licence will “very quietly” be killed off in the coming years.
“From ASIC’s perspective, they’ve got an extra body of people they’ve got to look after, and in any business where a minority of people are taking up so much of your resources, you start to wonder, what’s the point?” he said.
“I think it’s going to be a matter of time. It probably won’t be immediate, there will be a lot of egg on faces, but it’s likely to happen in the next few years, very quietly.”
The limited Australian Financial Services Licence (AFSL) became available to accountants because of the phase-out of the accountants’ exemption, which ended in July last year. The exemption allowed accountants to provide superannuation-related advice without operating in an AFSL environment, like financial planners are required to.
However, it has so far been a wildly unpopular regime. Only 1,181 applications for limited AFSLs were made during the three-year transition period of July 2013 to July 2016.