Accountants opting to become authorised representatives to continue advising on self-managed super funds following the scrapping of the accountants’ exemption this year have expressed displeasure at the prospect of having to pay a clip of their fees to their financial planning licensee, according to The Fold Legal.
Solicitor director, Jaime Lumsden Kelly, warned that while becoming an authorised representative might seem like the easier option, it came with its own set of constraints which accountants needed to be aware of, including planning practices taking a cut of all fees that the accountant would generate under that licence authorisation.
“The few that I’ve spoken to about it haven’t been particularly pleased because it’s their client right?” Lumsden Kelly said.
“They view it as their clients, it’s their money, it’s their fees, and they’re already paying them to use the licence, why should they get a cut of the fees. Accountants aren’t necessarily unfairly unhappy because it’s not a system that they’re accustomed to.”
Furthermore, accountants did not want to be financial planners and strongly opposed the idea of being shoe horned into a model where they were expected to sell products, and Lumsden Kelly warned this would not work.
“They get very resistant. In some cases they can be almost hostile to that notion.
“SMSF advisers have said that they think they’ll change their model and go in a different direction and that may be partly because accountants didn’t find their offering appealing because of the associated product expectation,” she speculated.
Instead, she suggested a light touch tailored licensing regime where financial planning practices were flexible enough to offer certain authorisations to accountants.
“It’s basically a limited licence authorisation done in an authorised representative model. They seem to be having more success capturing those people,” Lumsden Kelly said.
