Accountants wishing to avoid product distribution pressure should not join an institutionally-owned licensee but should partner with a non-aligned adviser to benefit from planning advice without the compliance and administration burdens.
This is view of Paradigm Wealth Management managing director Patrick Nalty, who said accountants who did join an institutionally-owned licensee would leave as a result of the differing compliance and product focus.
"Accountants who decide to become an authorised representative of an institutionally-owned licensee will ultimately end up leaving once they realise that they have to comply with their dealer group's compliance regime and approved product list," Nalty said.
"The reason institutions own dealer groups and support advisers is to secure distribution for their products."
Nalty said accountants who wanted to hold their own licence would need to earn at least $300,000 per annum, while practices would have at least eight partners and $6 million in revenue to be able to maintain their own licence.
Rather than proceeding down this path, accountants would be better served by employing an experienced adviser to operate their own internal planning arm or to partner with a non-aligned planning practice.
"Accounting practices can continue providing quality advice to clients but be absolved of the additional responsibilities by entering a joint venture with an independent advice business," he said.
"There are onerous responsibilities attached with holding an AFSL and other intricacies which most accountants are unaware of."
Nalty said the higher levels of professional indemnity insurance premiums for advisers — and the prospect of dispute resolution without legal representation via the Financial Ombudsman Service — might also be areas accountants had not considered.
Accountants will be required to either gain a full licence, a limited advice licence or use a third party to provide advice on the establishment of SMSFs after 1 June 2016 when the current exemption on advice comes to an end.
