Planners need to take the initiative in reaching out to accountants to handle the new licensing arrangements following the expiration of the accountant’s exemption, according to Melbourne-based financial services consultant, John Wiseman.
According to Wiseman, one of the consequences of the new licensing regime is that the real cost of running a compliant self-managed superannuation fund (SMSF) is about to be revealed and many trustees and members may be unwilling to pay the higher cost or adhere to more stringent requirements.
He said that in these circumstances he believed planners should be seeking to work with accountants on the new licensing arrangements even in circumstances where the planners did not have a particular expertise in SMSF advice.
“A major reason why more planners have not sought to contact accountants is their speciality and competency is not related to SMSF. I strongly believe all planners irrespective of their expertise should be acting NOW to engage with accountants,” Wiseman said.
“Furthermore, I would suggest that there are a very large number of SMSF trustees and members that if they are not aware now — they soon will be that things are going to change — and change significantly,” he said.
Wiseman said that for those accountants who have deferred making a decision or are unlikely to continue providing SMSF advice, a meeting with a planner could well be the solution to their difficulty.
He also claimed that the provision of insurance/risk protection would be another area that would be closely scrutinised by authorities and added that “past practices, of a cursory tick to the insurance and protection question in the annual audit will simply not be acceptable”.
“A more robust and compliant review will be required in order to insure the Australian Taxation Office and the Australian Securities and Investments Commission (ASIC) are satisfied that meets the requirements of the fund compliance auditor (not the SMSF auditor), the professional indemnity (PI) providers — and hopefully not the legal team required to defend your actions in a court of law or ASIC enquiry,” Wiseman said.
“The SMSF insurance requirements will need to be supported by well documented needs analysis, appropriate quotes and recommendations with all details included in a statement of advice (SOA),” he said.
