Accountants rational on licensing

Accountants have been acting mostly rationally in their reluctance to become fully licensed under the new accountant licensing regime, according to Premium Wealth Management chief executive, Paul Harding-Davis.

Commenting on recent data confirming that accountants had been slow to take-up the limited licensing option, Harding-Davis said that, objectively, many accountants had probably made the judgement that it was more expedient to become a limited authorised representative.

"That would explain what we are seeing," he said. "It is possibly a case of accountants simply deciding against taking the full licensing route and opting to undertake RG 146 — something that they can complete in two or three months."

Harding-Davis' analysis has come at the same time as a number of dealer group executives have expressed concern that the new accountants licensing regime has not been appropriately understood by professional indemnity insurance providers.

They said insurers had been quoting premium prices which they did not believe were commensurate with the level of risk involved in having accountants working under umbrella licensing.

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The accountants understand the new rules. Accountants can read and think…

What is not understood is the nature of the SMSF conversation. The client initiates it, not the accountant. The client then manages the SMSF, not the accountant.

That’s why it’s called “self-managed superannuation”. The “self” bit refers to the client, not the accountant.

The accountant’s role is to facilitate the set-up of the SMSF and to handle the accounts and the audit, ie the processes that the client cannot (easily) manage. The client does the rest.

For 90% of accountants nothing changes on 1 July 2016.That is why 90% of accountants have not done anything. They don’t have to. For them nothing has changed.

"the client initiates it, not the accountant". I think you're wrong here Terry. To imply the accountant is some mere order taker is way off the mark. The accountant initiates it and usually during an almost mandatory 30 minutes tax return interview... Conversations go like this.. Year 1 Mr Accountant says.. "how about those markets, certainly rough"" ..Year 2.. "how about those markets, pretty poor"..Year 3, how about those super fund returns, a lot of my clients are managing there own super... year 4....the client now says, "I think I need one of those SMSF thingo's"'... Yes I guess they are just order takers aren't they. Accountants have operated without any regards to the current consumer protection requirements, (either willingly or unknowingly) and will continue to do so for many many years to come.

Accountants are not stupid people, they woke up 5 years ago and realized PAYG tax returns are gonski. To imply they are mere order takers is doing them a disservice, only trying to save accountants from the ridiculous amounts of red tape and compliance . They are the masters and have been running a bait and switch program for years. The bait being personal tax returns and the switch being an upsell into a SMSF with Fries and a Trust deed whilst they wait in the reception room. Walk into any public practice firm around Australia and you'll see accountants getting paid bonuses for up selling SMSF, ringing bells and doing a Jerry Maquire SHOW ME THE MONEY, every time a SMSF is SOLD. Accounting firms of today want people who can sell SMSF and work in a high pressure sales environment as the numbers work can be outsourced to the Philippines.

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