Accountants want advice access via Chapter 7 rewrite
Accountants working under limited licensing arrangements are the fastest declining segment of the financial planning profession which probably explains why they want the Quality of Advice Review (QAR) to grant them right of entry to advice provision.
Three key accounting bodies want Chapter 7 of the Corporations Act amended so that accountants can stop walking a “tightrope” and can legally provide advice in key areas.
The three bodies – Chartered Accountants Australia and New Zealand, The Institute of Public Accountants (IPA) and the SMSF Association have used a joint submission to the QAR to argue that suitably qualified and regulated accountants under the Tax Practitioners Board should be able to provide advice to consumers in seven areas
- 30 June tax planning using superannuation contributions
- 30 June tax planning using various prepayments
- Small Business CGT Concessions ‘Retirement Concessions’
- Small Business CGT Concessions ’15 year exemption’
- Tax planning advice ‘pensions’
- Tax and Business Structure Advice – SMSF establishment
- SMSF Administration Services and Compliance Advice ‘Investment Strategies’.
The accounting bodies said the seven areas “are common scenarios our members face on a regular basis”.
“The proposal recognises the limits of this advice by mandating that when this advice crosses over into personal financial advice, then it must be referred to a licensed financial adviser,” the submission said. “It simply ensures that consumers can obtain the full range of tax agent services from their choice of professional adviser without being constrained by duplicative and prohibitive regulation.”
“Accountants believe they are being asked to walk a tightrope. One wrong step and they fall into providing unlicensed advice and may be subject to substantial penalties. It is not efficient or fair for the regulatory environment to create such uncertainty,” the submission said.
The submission said this was because while the Corporations Act allows accountants to talk about factual information with a client concerning the cashflow impacts of issues such as those covered by its seven areas, the legislation also “defines ‘financial product advice’ and ‘personal advice’ in such a way that it is very difficult to speak about the above matters without accidentally providing information deemed to be trapped by these definitions in Chapter 7 and hence potentially face significant penalties for providing unlicensed advice, especially as this area of the law applies a reverse onus of proof”.
It said that Chapter 7 of the Corporations Act needed to be clear and enable operators to act professionally and fairly – something it currently does not do.
What are Accountants worried about ?
ASIC has never ever once busted one single Accountant for the bucket loads of illegal AFSL Advice they provide with zero AFSL compliance.
Be it intentional or unintentional, never a single Accountant busted.
Accountants worked out they are mad to be Limited AFSL licensed as there is actually far less risk being unlicensed and huge cost savings.
A few have been busted but they’re labelled as advisors when misconduct occurs
Once again accountants get a free pass to say and do whatever they wish. We have to prepare a 20-page plus document to say why it is a good idea to commence a SMSF or go into an investment strategy, but accountants can get away with a 20-minute conversation and then organise the documents for the person to sign. Then if something goes wrong or isn’t appropriate for that person, then they roll out that it was only general advice, and it was the person choice.
Accountants should not be permitted an exemption into these areas of advice.
We see plenty of clients labouring under false assumptions or incorrect guidance provided by accountants.
If they wish to expand into these areas of advice then they require the appropriate knowledge and qualifications.
They must also have their advice scrutinized under the same lens as applies to financial advisors.
Levy clearly stated she was not interested in pushing a further carve out for Accountants. They should operate under the same requirements needed for Advisers. There’s also no carve out for Mortgage Brokers or Lawyers, correctly. Why on earth should Accountants benefit in the way this article suggests? Absurd.
Agree with these 3 comments.
We are an industry where everyone wants a carve out. Everyone needs to be on the same page, same education level etc.
Just meet the standards….
I want a carve out to do tax returns!
Imagine accountants with free reign to setup SMSF’s willy-nilly. Every adviser has seen some atrocious SMSF setups where the client doesn’t need it but the accountant has “recommended” it.