Accounting body calls for members to launch financial advice onslaught

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Accountants are in the best position to deliver trusted low-cost financial advice because they don’t have to sell a product, claims a major accounting body. Are you under threat?

Financial planners might see more of their clients getting advice from accountants under the new limited AFSL.

Institute of Public Accountants (IPA) Senior Tax Adviser Tony Greco believes there will be a strong uptake of the limited AFSL amongst accountants, and it will be easy for them to gain the licence.

“Practising accountants are already qualified to give this kind of advice,” he said.

“Back in 2002 this was taken away from [them].”

Greco said licenced accountants will be able to talk in general terms about what is best for the client – which in some instances might be to do nothing at all.

“The potential is there to provide truly independent advice… because they don’t have to sell a product,” he said.

Greco said FoFA reforms might result in planners only dealing with high net worth clients. This would leave a gap in the market for clients that are in need of low-cost advice.

According to the IPA, potential financial advice clients that accountants will be able to target include more than 70% of working Australians that visit their accountant at least once a year, and 95% of businesses.

The growth of accountants into the financial services arena will “place them in the best position to deliver low-cost, broad non-product specific advice,” said IPA CEO Andrew Conway.

“The new limited AFSL will mean that our members will be able to legally provide a broad range of financial advice to their clients when the Future of Financial Advice reforms come to fruition on 1 July 2013.”

Conway believes accountants are already clients’ trusted advisers for basic financial advice and the reform will only build this relationship.

Do you feel under threat from accountants? Have your say below.

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  • Adam P on 13/12/2012 12:47:35 PM

    As Michael above says stop whinging and go and partner with an account. Good idea Michael, something i did over 11 years ago. And guess who pushed the accountants for at least 8 of those years to do much more with SMSF's, up skilling, up systemising, up strategiesing, etc to make the most of the SMSF world.
    As i identified to my Accounting partners, most of their A clients already had an SMSF but it wasn't being utilised very well. So now i have spent many years pushing the SMSF world and they have come on board more over the last 3-4 years.
    But now with the Accountants half baked AFSL they will simply be able to walk in and take a significant part of the financial strategy / SMSF business off the planning business at zero cost. And a lot of that on the back of my helping educate them technically and business opportunity wise.

    And how the FPA think the Accountants AFSL is a good thing for financial advisers is beyond me ??

  • bill on 13/12/2012 11:16:24 AM

    Or even better become an accountant.

  • Adam P on 13/12/2012 11:13:07 AM

    The key component will be compliance. Accountants hate AFSL compliance (Fact Finds, SoA, Comparative analysis of existing super / insurance to new SMSF,etc) more than anyone and the amount of verbal, non-compliant AFSL advice already given is massive. Unfortunately i dont believe that this will change under the limited AFSL. I may well be wrong but given everyone already knows that accountants provide massive amounts of SMSF pension, contribution, death benefit, etc structural advice with zero AFSL compliance and have never, ever been pulled up for this once by ASIC, ATO, IPA, ICAA, etc. It is hard to see a level playing field, thus accountants will be able to provide lower cost advice because they will be allowed to do a half arse job with zero AFSL compliance.

  • Michael on 13/12/2012 8:55:50 AM

    instead of whinging go and find an acocuntant you can partner with and provide a dual service offering that deals with all the required issues. Most people can be won over as to why "cheap" is relative and returns below what they might otherwise achieve are a cost.

  • TW on 12/12/2012 4:35:34 PM

    Many accountants have not enough knowledge or not update knowledge, so they bother to look at investment or insurance issue. Low cost basical means no services.

  • Tony on 12/12/2012 2:26:55 PM

    Mmmmmm, low cost advice from an accountant....i'd like to see that!!!!

  • Mike Smith on 12/12/2012 1:19:42 PM

    I agree with Another Mad Planner, FOFA applies to Accountants and Planners, so cost will be the same. Lets have a level playing field when it comes to delivering advice.

    How many accountants have set up a SMSF for their client under the guise of tax planning advice and leave their clients on their own devices from an investment point of view i.e. cash account.

    Effectively just lining their own pockets by putting that SMSF on the ongoing compliance service i.e. tax returns.

  • Another Mad Planner on 12/12/2012 12:55:17 PM

    FOFA is FOFA and applies to all including accountants. For accountants to say they can do it cheaper than FP's is a laugh as the cost will be the same.

    Accountants product is tax and SMSF's.

    A product is still a product, wether it be a SMSF or a service!

  • Paul F on 12/12/2012 9:52:48 AM

    Andrew must be a very influential person if he has seen the draft licensing rules and understands exactly what requirements his members will need to adhere to give the limited advice in the carve out?
    I think he has missed the point, accountants have been giving this advice for years in breach of FSR and the licensing rules. Now they will have to give those recommendations in writing.... with all the usual disclaimers and transparency that the advice industry has. Additionally they will even have to consider 'alternatives' when discussing SMSFs and appropriate solutions.
    This and we still haven't seen exactly what hoops the regulator will set up for accountants to apply for these licenses?
    Accountants had the capacity to give advice under the relatively loose licensing arrangements prior 2003 and frankly the Bleakley's and to some extent, the Count models were failures. It is simply difficult to wear two hats and do a good job of both.
    Accountants need to be the trusted adviser recommending their clients to other trusted advisers. That will be the may to look after the consumer.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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