Up to 10,000 accountants will be able to broaden the scope of financial advice that they can provide should draft regulations pass into law.
According to an official statement from Minister for Financial Services and Superannuation Bill Shorten, the draft regulations, dubbed as a "win-win", expand access to financial advice and better protect investors by delivering on the government’s commitment to replace the accountant’s exemption with a new form of limited licence.
“The regulations will also benefit thousands of small businesses by creating a significant opportunity for up to 10,000 accountants and the estimated 18,000 financial advisers who wish to grow and diversify their business,” said Shorten.
“Collapses such as Trio highlight the need for investors to fully understand the alternatives before changing their existing superannuation arrangements. This new licence means licenced practitioners will advise on a wider range of alternatives, rather that limiting their advice to the establishment of a self-managed super fund.”
“By giving financial services practitioners the opportunity to expand their businesses, consumers can expect greater competition in the market and therefore more competitive prices.”
According to Shorten, the new limited AFSL will replace the current accountant’s exemption and will give up to 10,000 accountants the opportunity to provide a much broader range of financial advice.
Key changes include:
in addition to being able to advise on SMSFs and superannuation generally, licence holders will be able to give ‘class of product advice’ on basic deposit products, general and life insurance, securities, and simple managed investment schemes;
streamlined experience requirements for accountants who hold a practicing certificate issued by one of the professional accounting bodies (the Institute of Chartered Accountants in Australia, CPA Australia Ltd and the Institute of Public Accountants); and
an exemption from the audit requirements for limited licence holders who do not handle client money and instead submit an annual compliance certificate.
Shorten also noted that the reforms extend the consumer protection provisions of the Corporations Act, such as FoFA’s best interests duty, to financial advice provided by accountants
“I am also still considering whether other professional qualifications could also form part of the streamlined arrangements, for example, practicing certificates issued by the SMSF Professionals’ Association of Australia,” said Shorten.
“In addition to feedback on the draft regulations, I invite submissions to address this issue.”
Click here to see the draft regulations and draft explanatory statement. Submissions on the draft regulations close on 21 December.
The FPA has welcomed the draft regulations, having long advocated that, in order to provide greater consumer protection, all individuals who want to provide personal financial advice must be licensed.
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