Accountants

“SMSFs now represent the largest single chunk of the Australian super pool, and thousands of new SMSFs are being established every quarter.” – James Dunn, 27 September 2013

Why the buzz about Accountants?

As of 1 July 2013, accountants who hold a public practising certificate from the Institute of Chartered Accountants, Institute of Public Accountants or the CPA can apply to ASIC for a Limited Licence under a simplified application process.  We have outlined below what a Limited Licence will allow you to do.

Opportunity?

Simplified access to a Limited Licence allows accountants to expand their service offering beyond establishing SMSFs. Combined with a growing SMSF pool of funds, estimated at $496 billion of funds or nearly one third of all superannuation monies in Australia, this presents a great opportunity for accountants.

SMSF Exemption…running out by 1 July 2016 :

The SMSF exemption will be expiring on 30 June 2016. This means that if you intend to advise your clients on the establishment of SMSFs on and after 1 July 2016, you will need to be appropriately licensed by ASIC or authorised by someone who is appropriately licensed to undertake that activity.  Here is a link to how ASIC explains this.

Your Options:

  1. Your own limited licence
    From 1 July 2013 until 30 June 2016 you can apply for a Limited Licence through a simplified process which will not require you to demonstrate prior experience in the financial services industry as long as you hold a practising certificate from the CPA, Institute of Chartered Accountants, or Institute of Public Accountants.  After 30 June 2016 you will need to apply for a full licence (Australian Financial Services Licence) and show at least 3 years out of the last 5 years experience in the financial services industry in support of your application. This is a more extensive and costly application process.
  2. Become authorised under someone else’s licence
    Alternatively you can be covered by someone else’s licence as an authorised representative. By becoming an authorised representative you become an agent of a licensee. This will involve different commercial and legal arrangements and may include payment of an annual fee or percentage of income, contribution towards PI insurance and other fees.  As the principal will generally be deemed liable for the agent’s actions, this arrangement is likely to involve degree of control over the activities which you are authorised to carry out, including the advice you provide.
  3. Your own full licence (AFSL)
    If you can meet ASIC’s requirements for a full licence, you may apply for this at any time.  Importantly this involves demonstrating to ASIC that at least some of your staff have sufficient experience to support the authorisations which have been applied for. If you don’t have this experience yourself, you may join together with someone who does, for example an experienced financial planner or other financial advisor, to best suit your business needs.

What will a Limited Licence allow you to do? 

You will be able to advise specifically on superannuation products and provide strategic financial advice:

  1. can provide financial product advice which considers specific superannuation products and self managed superannuation funds, and implement this by arranging for your clients to purchase or sell those products.
  2. can provide strategic advice on classes of financial products for which you are authorised under your licence. Providing this advice is not limited to the context of self managed superannuation funds
  3. cannot provide specific advice on any financial product other than superannuation
  4. cannot implement the strategic advice by arranging for your client to purchase or sell any specific financial product.

Please contact us if you wish to discuss your options in more detail.