Financial planners and accountants need to work together to lobby against licensing changes that affect both sectors in similar ways, according to HNW Planning director Rob Cumming.
Cumming said that like financial planners, accountants were being required to hold various licences to cover instances where they may give advice on self-managed superannuation funds (SMSFs) or even incidental credit advice, such as recommending clients increase their overdraft to cope with short-term cash issues. Cumming felt that there was also pressure from certain quarters for accountants to have additional licensing, whereas an Australian Financial Services Licence (AFSL) should be more than adequate.
In light of the Cooper Review’s proposed removal of the accountants’ exemption for SMSFs, HNW Planning launched an online ‘Restricted Authorisation’ service for its accountants, enabling them to advise on superannuation and SMSFs. Cumming hoped that by taking this step and by providing accountants with licensing coverage ahead of the Cooper changes, the regulators would see that the industry was capable of coming up with solutions without the need for further licensing and compliance burdens.
Cumming conceded that in light of increasing compliance burdens, financial planning and accountancy businesses might take a commercial decision to join together. But overall having four or five licences was “crazy for all concerned”, he said.
“If the AFSL and the current legislation works perfectly well, then why a separate licensing regime for accountants?” he asked.
“It’s important to get the precedent out there so that the industry is not under the belief that they have to get under a whole new licensing regime, because that will backfire as it has with the credit licensing regime.”
Cumming said that some of the repercussions of increasing regulatory burden were: disenfranchising clients, accounting groups restricting their offerings, and consolidation of the professional indemnity insurance industry. On a more positive note he said it could lead to a strengthening of referral relationships.
