Accountants left out in the cold

Accountants have been prevented from providing even non-specific advice on superannuation products after revisions to the Financial Services Reform (FSR) regulation added more fuel to the fire regarding accountants giving financial advice.

The revisions effectively mean that accountants are now able to help clients set up a superannuation fund but they cannot move beyond that to provide even general advice on investment products.

The chief executive of the Institute of Chartered Accountants, Stephen Harrison, says he is disappointed by the changes, particularly those which suggest an FSR licence will be required when giving general advice on superannuation structures where an actual superannuation fund is yet to be established.

He says that the Institute believes that in such situations, accountants are not providing advice in respect of a particular superannuation fund, or particular investments, and therefore aren’t giving financial product advice.

Harrison says that there is “still room to manoeuvre on the issue”.

CPA Australiaalso expresses concern about the implications of the changes, with CPA Australia’s financial planning manager Kath Bowler claiming they would create confusion in the marketplace and be difficult to enforce.

She says CPA Australia will be conducting an education campaign to make clear to members the implications of the changes.

However, chief executive of theFinancial Planning AssociationKen Breakspear says he does not believe the changes represent a particular hurdle for accountants, who will simply need to split their two functions.

Breakspear says that of more concern are proposals, backed by the Australian Consumers’ Association, to alter the restricted definition from ‘financial planner’ to ‘independent financial planner’ — something which risks diluting the overall policy intent.

The deputy chief executive officer of theInvestment and Financial Services Association(IFSA), Jo-Anne Bloch, says the group believes the impact of the regulations is appropriate.

“IFSA supports what the Government has done because we support the view that people who are providing advice should be appropriately qualified and licensed,” she says.

According to theAustralian Securities and Investments Commission, accountants will need to be licensed in virtually all circumstances where they can be deemed to be giving investment advice.