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Forward Thinking Magazine : August 2011
8 Macquarie Adviser Services Macquarie Adviser Services is going into identifying improvements that can be made to the licence application process as well as ongoing compliance and audit requirements and the associated costs, but there is a long way to go. In the long run, if licensing for structural, non-investment advice can be made more workable and affordable, this should benefit not only accountants looking to become licensed for SMSF purposes but should also benefit other advisers who are seeking this or even more comprehensive licences.” While the extent of competencies and advisory areas applicable for a typical accountant’s licence are yet to be bedded down, Shirlow’s broad expectation is that the advice areas would include structural advice on superannuation, specialist SMSF and taxation issues, including comparison of fund types, rollovers and contributions, but would not include advice on particular investments or investment products. Most industry bodies expect the competency and other regulatory requirements for the licence to match those that apply to someone currently licensed to provide advice in those areas. How the accounting profession responds to the idea of an accountant’s licence to provide SMSF advice will be a case of ‘wait and see’. However, Karakaidos says much will depend on the type of businesses the accountant has. The preparation of financial statements and tax returns is the full extent of many client/accountant relationships, so the accountant may not be aware of the `big picture’ of their client’s wealth and financial objectives. Ultimately, Karakaidos says planners and accountants are looking for simple and cost- effective compliance requirements that are consistent with the advice given. “File notes are pretty standard for any profession, but if a Statement of Advice is what’s required, or a letter outlining the recommendations, the basis for these, the consequences, conflicts and so on, then this is more labour intensive and may increase the cost of providing the advice”, he says. Only time will tell how these issues are dealt with, but as Heffron says, perhaps the Corporations Law – which effectively is the legislation that governs the financial services industry and the selling of financial products – cannot handle such intricacies without significant change. “Some clarity around some of those issues would be fantastic,” O’Connor says. “Coming from a background where we work very closely with accountants, what they can and can’t say, and at what point they bring in the specialist are very grey areas.” Some believe the potential licensing requirement may cause many accountants to walk away from the industry. “If the process is too cumbersome and too drawn out, and it’s going to take them a lot of time and effort, they’re not going to pursue that path,” Tramontana says. Shirlow says that relevant professional bodies are exploring ways to develop a more streamlined process for accountants – and potentially other advisers – to get a licence to provide structural advice, than exists today. “The aim will be to be able to obtain and maintain a licence along these lines without undue hassle or cost”, he says. “Having said that, there is a significant gap to be bridged between the expectations of various stakeholders. A considerable amount of work I think as an industry we think it’s a good idea to have a range of advice offerings but the [current law] often makes us nervous in relation to what the client perceives they’re getting. JAne CouCHMAn