Login
ASIC urging accountants to make contingency plans
ASIC is getting in touch with some applicants for the limited licence, advising them to "prepare for the contingency" that their licence may not be approved by the 30 June deadline.
In August last year, ASIC advised accountants that if they did not lodge their applications by 1 March 2016, they would face a "significant risk" of their application not being assessed and approved by 30 June.
ASIC is now writing to applicants for limited AFSLs who have applied beyond this soft deadline, advising them that there is a possibility their applications may not be assessed and approved by ASIC by 30 June 2016.
In cases where ASIC has received an application but has not granted a licence by then, the applicant will not be able to provide SMSF-related financial advice until they are granted a licence or they become an authorised representative of a licensee.
Accountants found to be providing unlicensed services will risk severe regulatory action, ASIC warned.
"Providing unlicensed financial services is a criminal offence," said ASIC’s senior executive leader, assessment and intelligence, Warren Day.
Speaking to SMSF Adviser last month, solicitor at The Fold Legal Jaime Lumsden Kelly said overall the approvals process has been "slow going", due in part to the regulator’s lack of resources and inadequacies in licensing applications.
However, she believes ASIC has now put in place more resources to deal with the new regime.
Read more:
SMSFs driving up Queensland commercial property prices
ASIC acts on 'best interest' breach following super issues
Cooper points to unknowns with CGT exemption
New ATO-approved course available to trustees
You obviously don't like FP's, which is your choice. In relation to independent advice I am sure that clients who have invested in mortgage funds, agricultural schemes and a music streaming site which was not allowed to list on the ASX through their accountants would have appreciated the benefits of being able to take action against a licensed adviser rather than having to take their "trusted adviser" to court. Conflicts of interest exist in all industries and accountants are definitely not above them -- which is why licensing and consumer protection are needed. In relation to SMSF's if you don't want consumer protection then in reality there should be a legislated minimum to stop accountants setting up SMSF's with balances less than $200,000 just to boost their time sheets but this won't happen so licensing to provide consumer protection is required. In addition it is the law so stop whinging.0- Ashamed and a sham? Seriously.
What accountants get and FP's don't is that clients want independent advice on a range of structures, SMSF's being only one. The main reason clients set up SMSF's is that they were sick of paying high fees for poor advice to FP's or in many cases, fees for no advice because a FP set up an investment years before. How many FP's tell a client to buy an investment property - not many because they can't charge a fee for doing so.
Given that FP's are trusted as much as politicians and used car salesman the probable result of the new changes is that less impartial advice will be given as people will be unable to get it from their accountant and will not want to go to a FP.0 - Concerned Accountant - I hear what you are saying but it is absolutely ludicrous that the average SMSF punter will happily pay tens of thousands in commission to a real estate agent when dealing with property - even if the agent does naught work - simply because "that's just the way it is", and yet will shy away from paying for advice from a specialist that can substantially benefit them. This too will take a period of adjustment, and if a trustee is too ignorant to approach an FP (or their a/c is negligent and doesn't recommend seeing one) then so be it, they can suffer the consequences.
What would you say if in a BBQ conversation a business person wanted solid tax advice but only wanted to go see a supermarket stall 'tax agent' rather than approach a professional accountant?0 - Here's what financial planners get that accountants don't: SMSFs are not just a 'vehicle' that you can do anything with, they are a structure that has serious implications for underlying investments, insurance, tax and compliance overheads. The advice has to be holistic and take the client's whole circumstances into account.
But for years accountants have had one product to push - SMSFs - and that's what they've pushed. As a result, there are tens of thousands of underperforming funds out there, making losses and difficult to exit. Suitability for the client? Who cares! I'm a Holden dealer, you come to me, I'm gonna sell you a Holden not a Ford!
The whole accounting profession should be ashamed. Their professionalism is a sham. Bring on the breach actions ASIC.0 - Sadly, it going to be the client that suffers.
Answers to questions asked of most of my SMSF clients over the last 2 years have shown that very very few of the existing funds will approach a FP for advice - even if the accountant cannot provide the specific advice they are asking.
The result is that unlicensed accountants can only give "general" advice and not the specific advice the client needs. - even after in some cases of 20+ years of previous advice being provided.
The client loses choice.
Pity... as this is all due to the reclassification of a SMSF as a "financial product" rather than the business "vehicle" that it actually is - as are partnerships, trusts, companies and sole traders.0 - Chris
It's called the law. Stop complaining, start complying.
Change (& sh*t) happens, deal with it.0 - For heaven's sake. ASIC gave a guaranteed processing undertaking seven months in advance.
August 2015 - apply before March 31 to be guaranteed timely approval:
<a href="asic.gov.au/about-asic/media-centre/find...-time-to-act-is-now/" rel="nofollow">asic.gov.au/about-asic/...</a>
June 2016 - hardly any accountants have applied:
<a href="asic.gov.au/about-asic/media-centre/find...ts-end-30-june-2016/" rel="nofollow">asic.gov.au/about-asic/...</a>
July 2016 - accountants still whining about their ability to make money - sorry, compliance overhead I mean - yet have time to lord over others about how professional they are.
It's always ASIC's fault, ASIC ASIC ASIC. Identical ethics requirements are in TASA. What exactly is the problem here?0 - Exactly what Alb said Chris. It's not like it hasn't been well telegraphed to accountants that there will be a change a coming. Do they need another 3 years to get it happening???
It's like my 15 year-old who waits until the night b4 his assignment needs to be submitted to start and then finds the printer out of ink when he tries to print it b4 going to school.... Like they say, proper planning prevents piss poor performance.0 - Alb, it took ASIC 1 month to respond to an email of mine. I said to extend it for the FS01 applications already in the system that are taking months for ASIC to process. Not for everyone. I have "complied" for 25 years.0
- Chris, this has been coming for nearly three years. The solutions, info and transitional resources have been in place from the accounting bodies for 2 of those years. Come on, compliance is for everyone.0
Subscribe to the
BULLETIN
Get the latest news and opinions delivered to your inbox each morning
Subscribe
