Do accountants know the boundaries under limited licensing?
With less than six months to go before the accountants' exemption is scrapped, questions are being raised over the limited licensing regime.
Mergers and acquisitions consultant, and Radar Results Principal, John Birt, believes the limited licensing option for accountants, will not work.
Birt described the limited Australian Financial Services licensing regime for accountants as "dangerous", highlighting that accountants' professional indemnity insurance coverage that might not fully cover the advice offered to a client, particularly when it's limited advice.
"Do the accountants really understand where the boundaries are with the limited advice they can offer?" he asked.
"It's all well and good for ASIC to document the boundaries, but where are the patrol police to do the monitoring?
"I can see what the Government wanted to try and achieve by offering this band-aid solution, but I cannot see it working effectively.
"You're either fully in or fully out. That's how mistakes are made when you do something half-hearted."
Birt said that accountants needed to be fully committed to financial planning to make it worthwhile, noting that one planning group had decided against licensing accountants after assessing the risk/returns of the approach.
"Instead, they're concentrating on providing a high service to a few accountants prepared to fully engage in the process," he said.
AUTHOR
Nicholas O'Donoghue
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
