Accountants want right to deliver strategic advice
Major accounting group, Chartered Accountants ANZ (CA-ANZ) has called on the Government to use the May Budget to allow chartered accountants to provide strategic financial advice without additional licensing requirements.
The accounting group has used its pre-Budget submission to Treasury to list such a move as a short-term action item alongside reviewing financial adviser education standards to enable new avenues for advice to be created.
It also recommended replacement of the annual superannuation contributions caps and their replacement with lifetime caps and a discontinuation of the Better Targeted Tax Concessions policy.
On a list of long-term policy items, CA-ANZ urged reform of the tax base, including having the Productivity Commission comprehensively review all current retirement related tax and transfer payments policies, including aged care subsidies with the aim of removing inconsistency and complexity.
It said the Australian Law Reform Commission (ALRC) should also be tasked with review the superannuation laws in an equivalent way to its recently completed Financial Services Legislation inquiry.
However, on the critical issue of financial advice, the submission said that “new avenues need to be created to allow financial advice to be available to more Australians to help them navigate the complexity of the superannuation, taxation, age pension and aged care rules”.
“Our members are highly trained and skilled, and can assist, but the regulatory environment needs urgent reform to allow our members in public practice to assist their clients with their everyday financial challenges,” the CA-ANZ submission said.
“We acknowledge the government’s announced changes to its Better Targeted Superannuation Tax Concession (BTSTC) policy that will see those with more than $3 million in total superannuation assets face an additional 15% tax and those with more than $10 million in total superannuation assets will pay an additional 25% tax.
“The BTSTC policy seeks to solve a problem that will mostly correct itself over the next 10 years. Many of our concerns with the original policy were addressed with the recent policy changes.”
“However, we have significant concerns about the new policy settings, including the fact that the additional costs superannuation funds will incur initially to implement, and each year thereafter to administer this tax measure, will be paid by all fund members,” it said.
Erm, yes I think we need more SMSF’s with cash in a bank account of less than $500k for years. That’s what happened last time.
What was also never addressed was the loss of insurance on rollovers to cash only SMSF’s. Very few if any accountants understand risk insurance to a sufficient degree.
It’s like saying advisers are highly trained professionals and should do tax returns. This is also an obvious no. Both professions know enough to be dangerously but not competent. Both can look out for problems or opportunities and refer the client.
To fix a colossal screwup (ASIC and govt regulation of financial services) with another massive screw up of allowing accountants to provide advice is just plain insanity. ……unless you want your dentist doing your heart surgery
Another joke.
All of these arguments are framed around public access to advice and/or advice pathways for professionals.
In my opinion, those arguments have nothing to do with the true intention.
I’d argue they are purely frames in which accountants can horizontally integrate their businesses by asking for a carve out.
In my experience, some of the worst advice I’ve seen has come from accountants, notably in the establishment of unnecessary SMSF’s.
If accountants want to provide advice, they can go through the same channels that everyone else has to.
No carve outs.
They should 100% be allowed to offer strategic advice……. just as long as they undertake all the training and regulations we do.
On the flip side, should we be allowed to offer tax and accounting services without the additional training and regs?
Great point
Absolute Garbage that accountants are adequately trained to provide adequate financial advice.
They only want to target SMSFs as this gives them ongoing control and fees from their clients for doing very little. Big fees to set up and monitor.
The main problem we have recognised with accountants other than the relentless targeting for SMSF establishment is that very few of them do their due diligence in relation to properly reviewing clients financial situation including the need for risk and retirement advice.
They are also too heavily focused on tax reduction rather than asset growth which is essential for preretirement clients and young accumulators. Most accountants I have dealt with do not fully understand the strategies a Financial Planner regularly uses in our engagement with clients. They aren’t across the product or platforms and instead tend to focus on direct property and equities which very few of them have adequate training to advise upon.
It’s the same scenario with Industry Fund trustees who want to advise, but only on their own product which is not financial advice, its product flogging similar to what the banks were engaged in before the royalty commission.
Accountants aren’t well placed to give unbiased advice when they are strongly aligned to the sale and implementation of SMSFs, and to the direct property floggers.
Giving them the ability to advise will open up enormous conflicts of interests which cannot be appropriately monitored. It’s very dangerous ground and the lawsuits will be endless.
Why would accountants want this? At the moment they can operate unlicensed, under the radar and ASIC doesn’t care when they set up SMSF’s for no reason, other than a filenote, “The client directed me to set up SMSF, no financial advice given.”