A combination of factors, such as the Australian Securities and Investments Commission (ASIC) levy on top of licensing and Financial Adviser Standards and Ethics Authority (FASEA) requirements, are driving away a growing number of accountants with limited authority from providing financial advice.
Last week Money Management reported that the accounting firms with limited advice support services and for which the financial advice was only a small part of their day-to-day work were driving the drops in overall adviser numbers observed by ASIC’s Financial Adviser Register (FAR).
Grahame Evans, the chief executive at Easton Investments, told Money Management that for many accountants the impact of ASIC’s levy was a final straw, given it came on top of the cost of taking the FASEA exam, the licensing cost, the cost of extra study, and the cost of doing continuing professional development (CPD).
Easton Investments, according to FAR data lost 10 adviser roles last week and lost over 60 adviser roles since the start of year.
“For many of them within the limited authority space ASIC’s levy has been really a nail in a coffin. The other aspect is the CPD and the [FASEA] exam and it’s all becoming too much for them, with very little returns, so many [the accountants] just decided to stop providing the advice in relation to self-managed super funds [SMSFs],” he said.
“These are not the people who have left the accounting practices, these are the people who have made a conscious decision to hand back their authorisations and not have one going forward.”
Evans stressed that this number, those who would decide to opt out from the industry, would be even higher after 31 December, 2021, as accountants in the limited authorisation space would be joined by many experienced advisers who would, most likely, stop providing advice come 1 January, 2022.
“The whole process is going to lose quite a number of experienced advisers and because of what is going on we are going to see less advisers that we have seen before because people are opting of doing what is required to be a financial adviser,” he said.
Evans also noted that since even the provision of general advice required to be authorised in some capacity, he expected many of the accountants, for whom the financial advice was always only a small part of their business, to move back to just providing tax advice which they were allowed to do under the Corporations Act.
“I think it becomes difficult because the clients will be asking their accountants about some aspects in relation to self-managed super funds. And now they either have to tell the client they can’t give advice in this area, other than tax advice, or they will have to refer them on,” he said.