Date posted: 4/10/2019

Review of limited licensing of accountants

The CA ANZ financial advice advocacy team is currently working on a review of limited licensing to develop an effective and permanent model for the provision of limited financial advice by accountants.

In brief

  • The ‘accountants’ exemption’ only allowed for the establishment and wind up of an SMSF without a licence
  • This model is no longer practical or relevant in the current financial advice environment
  • CA ANZ is working with CPA Australia to develop an alternative model to take to Government

New limited financial advice model

The current model for the provision of limited financial advice has become unworkable. Challenges limited licensees have faced include complex compliance requirements and increasing costs, introduction of ASIC’s industry funding levy and most recently the requirement to comply with FASEA’s standards.  The CA ANZ financial advice advocacy team is currently working on the development of an alternative solution.

Our objectives in undertaking this review of limited licensing are to:

  1. Allow members to give advice that is broader, strategic and more relevant than the ‘accountants’ exemption’, which was limited to only making a recommendation to either establish or wind up an interest in a SMSF.
  2. Reduce regulatory burden so advice can be more affordable for Australians.

As part of the process of developing the model, we have met with Senator Jane Hume (Assistant Minister for Superannuation, Financial Services and Financial Technology). We are collaborating with CPA Australia and have also been consulting with members through a number of workshops and focus groups and inviting feedback through our various newsletters and mailboxes – a process which is ongoing.

In its discussion paper on the review of the TPB, Treasury floated a re-introduction of the ‘accountants' exemption’ which has lately been attracting a great deal of media attention and member interest. We have responded to this with a press release, issued jointly with CPA, calling for a wholesale review of the regulatory framework. 

Our position is that the reintroduction of a mechanism that, due to its extreme limitations, is no longer relevant in the current, increasingly complex financial advice environment is unlikely to achieve the objectives of retaining accountants as trusted advisers in advice, nor enabling Australians to access quality, affordable advice.

Key themes emerging

Based on the member feedback received to date the following themes have emerged. These will all be considered for inclusion in our proposed model.

  • Reduction of regulatory burden for limited AFSLs: reduce compliance costs, streamline multiple registration to regulatory bodies, consolidation of CPD requirements, exclusion from the FASEA requirements as they are suited to full licences, replace limited AFSLs with some kind of registration or other arrangement.
  • Provision of superannuation/SMSF advice: an SMSF is a trust structure not a product, strategic advice around SMSFs should not require an AFSL (being a CA or a CPA should be good enough!), CAs & CPAs should be able to advise in the traditional super space including contributions, pensions, as well as establishment and wind-up of SMSFs.
  • Product recommendations: AFSL should be mandatory if product recommendations are to be made.
  • Trusted advisers: CAs & CPAs should be able to look after their clients properly/holistically as their clients trust them, be accountable to one professional member organisation for a Code of Ethics and have that organisation enforce it, be a member of AFCA to protect consumers.

Taking into account all of the above themes, it is clear that re-introducing an extremely limited mechanism will not address regulatory burden or the client need for affordable, accessible and quality advice provided by a trusted adviser. The industry is at a crossroads and we will continue to work to help shape it for the benefit of both accountants and their clients. 


Share your views

We are seeking further member feedback to input into this model which will then be circulated back to members for review.

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