“This option would bring back the accountants’ exemption and allow accountants to provide basic SMSF advice and services without having to operate in the AFSL environment,” Treasury’s discussion paper said.

However, in its joint submission in response to the discussion paper, both Chartered Accountants Australia and New Zealand and CPA Australia have chosen not to support the option.

“Tax is a key consideration for the majority of financial planning strategies. It is not incidental, it is material to the advice and recommendations,” the joint submission said.

“Further, the accountants’ exemption only permitted the recommendation to establish or wind up an interest in an SMSF. It was so limited that it did not even permit a recommendation to not establish an SMSF.

“Restoring such a limited exemption is not going to address the need to enable affordable, accessible and quality advice by trusted advisers.”

Conversely, the Institute of Public Accountants and the Tax Institute believe a return of the accountants’ exemption should be explored.

The IPA believes a return of the exemption would address a current market gap where taxpayers are not adequately serviced, and help fulfil the objective of the Future of Financial Advice (FoFA) reforms, which was to provide affordable and accessible financial advice to Australian consumers.

“The current regulatory environment has created artificial, impractical boundaries which hinder the ability of both groups to have broader-ranging discussions with their clients,” the IPA said.

“Appropriately qualified accountants are well equipped to deal with such advice, without the need to apply for an AFSL or limited AFSL.”

Specifically, the Tax Institute believes reintroducing a limited form of the accountants’ exemption should be considered.

The Tax Institute believes a registered tax agent who does not have an AFSL should be allowed to structure arrangements to make a contribution, receive a pension or exit an SMSF including setting up and closing down the SMSF; to recommend winding up of an SMSF in specific circumstances; commence an income stream and take a lump sum from an SMSF; make contributions to an SMSF; and advise on the application of the small business CGT concessions as they relate to making a contribution to an SMSF.

Wholesale review needed

As an interim solution, both CA ANZ and CPA believe ASIC and the TPB should operate as co-regulators of financial advisers and that the TPB is responsible for the imposition of sanctions for tax-related matters.

Instead, both major accounting bodies want Treasury to conduct a wholesale review of the current financial advice framework, citing “years of layered regulatory reforms”.

“A wholesale review of the current regulatory framework is needed to address the regulatory complexity caused by years of layered regulatory reforms, without any appropriate review to ensure these reforms are meeting their policy intent,” the submission said.

“For example, the objective of the Future of Financial Advice (FoFA) reforms was to ensure advice is in the best interests of clients and advice should not be put out of reach of those who would benefit from it.

“The objective of the review should be to identify policy changes needed to ensure that consumers can access quality affordable advice from their choice of trusted adviser.”