ASIC ‘finally’ releases AFSL guidance for accountants

Yesterday ASIC released guidance for accountants who are transitioning to the AFSL environment in order to provide SMSF advice, but may have missed the mark, according to a compliance lawyer.

ASIC’s Information Sheet 216 AFS licensing requirements for accountants who provide SMSF services (INFO 216) covers how the AFS licensing regime applies to SMSF services provided by accountants.

You can access the full information sheet here. 

Speaking with AccountantsDaily, Licensing for Accountants CEO Kath Bowler said that this information has been a long time coming.

“It is great to see that ASIC has come out, finally,” she said.

“We’re really working hard to try and make this work on a practical level and I know accountants are struggling with that, so I think there's still a lot of work to be done to make this operate smoothly on a practical level.”

The Fold Legal director Jaime Lumsden Kelly told AccountantsDaily that ASIC has taken a broader interpretation of the tax advice exemption than expected.

“If this is surprising to accountants, it will at least be a pleasant surprise because it allows them to give tax advice on very broad terms relating to financial products without needing a licence, or without needing to comply with disclosure requirements if they are licensed,” Ms Lumsden Kelly said.

While such broadness may be a positive in this case, Ms Lumsden Kelly said that other aspects of INFO 216 are not specific enough to accountants.

“While ASIC did provide some guidance previously, they have consistently referred to regulatory guides which are heavy on financial planning examples, and this information sheet continues to fall into the same trap,” she said.

“Accountants really need accountant-specific examples because accountants don’t do things in the same way that financial planners do: they don’t charge fees in the same way that financial planners do, and accountants have not historically had many of the same conflicts which financial planners do, and which have informed ASIC’s decisions on which examples to include in regulatory guides.”

Ms Lumsden Kelly said it would be useful to see ASIC take a closer look at how accountants do business and offer guidance on some of the key points of difference between accountants and planners.

“There is one example on class-of-product advice on shares in the information sheet which is useful, but in another place ASIC refers to ‘traditional’ accounting services as being exempt, and only lists tax returns as an example,” she said.

“There are numerous other traditional services, including business valuations and independent expert opinions, which are and are not exempt in certain circumstances.”

 

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