SPAA has highlighted the pros and cons of being an AR, as it encourages accountants to also consider getting their own licence (either full or limited) directly with ASIC.
Liz Ward, Head of Education Services for SPAA, says it’s imperative that accountants decide whether becoming an AR, or getting their own licence, suits their business model best.
She highlighted some of the benefits that come with AR status, which could be useful for advisers also trying to make the big decision whether to set up their own licence.
Benefits of being an AR included:
The investment in the licence with ASIC is undertaken by the licensee;
ARs may have access to more licence authorities than they would receive from ASIC if they went directly;
All the ongoing requirements are usually met by the licensee, such as initial and ongoing training, PI Insurance, membership of EDR, compliance requirements, disclosure documentation.
However, she said there were also considerations that might tip the balance towards pursuing other licence avenues, such as:
ARs pay a regular ongoing fee to the licencee;
ARs may be subject to strict contractual requirements, particularly regarding supervision, compliance, reporting, client confidentiality, and disclosure documents;
ARs branding rights may be restricted in favour of the licensees’ branding;
There could be a conflict between the licensees’ range of business ventures versus the AR’s business.
“There are a range of costs that are being cited; we are hearing that the price to prepare and submit an application for a limited licence may in the vicinity of $25,000 – $35,000 in the first year.
“This includes compliance consultancy fees to compile the application and having all the components required to support the application in place. A DIY approach is an option and could provide cost savings but, like all DIYs, usually results in an increase in the time and input required by the individual.”