We probably need to take a quick step back. People have got particularly excited by this whole new licensing framework and how it’s going to affect professional accountants.

The first thing would be to say that, for the vast majority of professional accountants who are currently unlicensed, they’ve actually made this decision over the last 10 years not be licensed.

So, we never had an expectation that once the transitional period came into play, that there would be all of a sudden a huge number of accountants pouring into the licensed environment, because they’d previously said, ‘we don’t want to be licensed; we are happy to be operating under the exemption’.

We never expected that there would be huge numbers initially. We think the take-up in terms of looking to operate under another entity’s licence, operating under a dealer group of some kind, or applying for their own limited licence, really wouldn’t occur until towards the end of next year.

A lot of people are talking about this as a great opportunity for accountants and for their practice. And for some of those practices, it is absolutely an opportunity to provide a wider range of services for their clients. But for probably the majority of them who are currently unlicensed, they are looking for what is the most appropriate solution for them to continue to provide the services that they’ve always been providing.

For that majority, do you think they will become authorised representatives?

We have about three and half thousand, if not more, [who are] what we call ‘sole practitioners’. I think the issue for them is one of independence and, therefore, I think their first preference would be to consider applying themselves for a limited licence.

It may well be that their first preference is ‘I want to definitely retain my independence; I’m going to look at the limited licence option as my first preference’. However, they may look at it and [consider] the potential with some of the compliance requirements or the cost, and think it may be more appropriate for them to operate as an authorised representative under somebody else’s licence.

So I think we’re going through a process at the moment. The vast majority of professional accountants, they are going through the process now of the pros and cons of what will be best for them.

One of the key issues will be: don’t just look at how your practice is currently operating and the services you’re currently providing. You really need to be looking [at] how you want your practice to look in five years’ time and what services your clients will want at that time.

I think [accountants'] initial thinking is ‘I just want to do what I’ve always done’, but we’re very much encouraging members to consider those [three- to five-year plans] for their practice and what services do they think their clients will be wanting.

What timeframe should accountants be acting in?

The first decision they have to make in assessing their practice and the services and the advice they currently provide is: do they need to be licensed? There will be examples, such as where a practice is purely a tax specialist or an audit specialist practice, [that they] don’t need to be licensed. They’re not advising on SMSFs or providing any sort of defined financial advice. You really need to make that decision over the next couple of months.

If your decision is that you need to be licensed, you can take your time considering over the next six months in what format that will be – ie getting your own licence, or becoming an authorised representative. But if you’ve made the decision that you need to be licensed, and you haven’t completed the appropriate education qualifications [and] training, then you’ve got to kick into that really immediately.

You don’t have to make your final decision on how you’re going to operate, but you need to get in and do the training, which is meeting the requirements under RG146.

A lot of our members are sole practitioners and as such, like everyone, they’re very busy. You need to have that 12-18-month period to work through the various courses and so forth that you actually have to do.

If you’re looking at operating, for example, as an authorised rep under another entity’s licence, speak to other chartered accountants who may already be operating under their licence to see how it fits culturally with the services that you currently provide.

Do you have any general advice to accountants who are going through this process or about to start?

The first bit of advice is if you haven’t addressed the issue, you need to do it without delay. It’s not necessarily meaning you have to make a final decision, [but] understand that you have to make a decision. If the decision is, ‘yes, I think I will be licensed in some shape or form’, then start the training, and then after that you start going through and saying, 'well, what is the most appropriate form for me to be licensed in?'

We have no vested interest in which way members actually go, and so we can provide them with some guidance.

Do you think the number of accountants with trustee clients will decrease post-2016, or will this licensing issue just sort itself out?

By default, I would suggest that the majority of practices will have to come into the licensing regime in some shape or form. For the vast majority of professional accountants, and chartered accountants in particular, whilst the SMSF is categorised as a financial product, the vast majority of chartered accountants see it also as a structuring advice vehicle.

I think for the vast majority of accountants who are in public practice, they will still have to consider SMSFs and advice around SMSFs post-2016, because that’s sort of the advice they’re providing – they’re not just looking at the SMSF as being a financial product per se, but rather [looking] at it as a structure and a form of asset protection.