The phase-out of the accountants exemption in 2016 was wildly unpopular in the accounting profession, on the basis of its replacement, the limited licence, being unworkable and clunky in practice.
For example, under a limited AFSL, an accountant advising on winding down a superannuation fund is restricted from discussing the insurance which may be in that fund. Failing to discuss insurance could constitute poor advice, and referring the client to a fully licensed financial planner at that point of the advice process can be messy.
The profession’s discontent has intensified in recent months, with software companies like BGL and associations including the Institute of Public Accountants (IPA) lobbying the government for a reinstatement.
The tax office yesterday acknowledged that the licensing regime has created a gap in the market which the accountants exemption once filled. That is, there is a consumer need for basic advice services that is not being met.
“There is a need in the market to service that gap between full financial advice and smaller matters,” said ATO assistant commissioner Dana Fleming at the Accounting Business Expo in Sydney.
Ms Fleming was referring in particular to SMSFs, which formed a core part of the services accountants provided under the accountants exemption.
Market research suggests that accountants are keen on continuing and expanding their SMSF advice services, but the licensing regime proves to be a hurdle in those plans.
Further, consumer-focused research consistently indicates that accountants are a preferred choice for advice related to SMSFs, despite competing factors like DIY online advice and low-cost service providers.