The Minister for Financial Services and Superannuation, Bill Shorten, has given a broad outline of the new limited Australian Financial Services Licence regime covering accountants, but it is unlikely to be in place before the middle of next year.
Announcing the changes, intended to replace the so-called "accountants' exemption", Shorten said there would be public consultation on draft regulations around the new regime, with the intention of giving effect to the measures in the second half of the year.
Any advice provided under the new limited licensing arrangements will need to measure up to the FOFA best interests duty.
Announcing the move on Saturday, the Minister also said there would be a streamlined transition period for accountants between 1 July 2013 and 1 July 2016 to make it easier for accountants to transition to the AFSL regime in recognition of their existing professional qualifications.
"This replacement of the current accountants' licensing exemption is a major step forward and will help facilitate a significant expansion in the provision of financial advice to Australians," Shorten said.
He said the new licensing arrangements for accountants were expected to see up to 10,000 accountants become licensed and able to provide a much broader range of financial advice than was currently the case.
The Minister said that in addition to being able to advise on self-managed superannuation funds and superannuation generally, licence holders would be able to give "class product advice" on basic deposit products, general and life insurance, securities and simple managed investment schemes.
"This new licence will extend the consumer protection provisions of the Corporations Act, such as the best interests duty in the recently passed Future of Financial Advice reforms to financial advice provided by accountants," he said.
Shorten said that, importantly, the new licence would not allow accountants to make specific product recommendations, but would allow them to provide more strategy and low-cost forms of advice.
