Some of the new products that have flooded the market since the onset of the new AFSL regime can inadvertently expose accountants to litigation and non-compliance, according to one licensing consultant.
Warnings on new accountant-focused products
Accountants who have chosen not to become licensed under the AFSL regime need to be extremely wary when using automated advice platforms and products in their practice, as the divide between the accounting services they are offering the client and advice that is being provided by the product provider can be unclear.
“[Accountants] need to be very clear that advice is being delivered by a different AFSL through a computer system,” said Sarah Penn, director at Mayflower Consulting.
“They can’t be discussing what the computer says in terms of advice, they can’t be trying to pass it off as their own. It needs to be quite a distinct hand-off to the computer system to deliver the advice,” she said.
If the accountant is seen to be giving the advice when they are not, this could lead to legal issues.
“People always go to the person that’s told them the information. This is why financial advisers end up in trouble. Some of the time it’s the adviser’s fault but some of the time it’s not, it’s the product provider’s fault,” Ms Penn said.
Clients who have experienced losses or other negative outcomes as a result of advice they have been given will always go to whoever their contact is, she stressed.
“So if people have gotten involved in dodgy investments, they’ll go to the adviser that told them about those dodgy investments. If people have been given dodgy advice from a robo-advice system, they’ll go to the accountant who sat with them while they entered all the information into the system,” Ms Penn said.
“At this point, it really doesn’t matter what the legal contract says in the background. They’re the person who’s going to get their name dragged through the mud from a reputation perspective. They’re also the person from whom the client is going to be looking for compensation.”