First planners, now accountants warn of exodus

The Australian Securities and Investments Commission (ASIC) has been warned that accountants operating under limited advice licenses have been struggling with the financial and emotional cost of dealing with the additional red tape associated with removal of the so-called “accountants exemption”.

As well, the regulator was warned that “an exodus of accountants from the financial advice industry at a time when the Government (through FASEA) is trying to increase the level of qualifications and professionalism would not be in the public interest”.

Accountancy body, Chartered Accountants Australia and New Zealand (CAANZ) made a plea on behalf of its limited advice license members as part of a submission to ASIC responding to the regulator’s Cost Recovery Implementation Statement, the details of which were revealed this week.

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The CAANZ submission stated: “Australian financial services providers have been struggling with the cost, both financial and emotional, in dealing with additional red tape as a result of the removal of the accountant’s exemption”.

“These costs encompass additional continual professional development as well as Cost Recovery Implementation Statement (CRIS) levies. Many of our members that are Australian financial services providers have to comply and pay other CRIS levies as well. The cumulative effect of levies, especially on small businesses which need the multiple registration is significant,” the submission said.

“Members who have limited licences are finding these costs particularly onerous and may are looking to exit this industry at a time when the government is trying to increase the level of qualification and professional in the industry,” it said.

The CAANZ submission urged ASIC to take into consideration when determining the CRIS levy how it would affect the business models of limited licensees and suggested a reduction in these fees could be achieved by waiving the fixed levy, reducing the per adviser levy or charging a fee aligned with revenue.

ASIC released its estimated Cost Recovery Implementation Statement for 2018-19 yesterday confirming that licensees providing personal advice to retail clients on relevant financial products will be paying amongst the highest levies estimated at a total of $25.031 million.

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time to change to the industry fund methods. Come-on retail funds. Create an employment contract to allow me to service clients in your super fund, and answer their one-off general advice queries, such as how much insurance should I have, and what investment option should I pick etc. Then I too can provide "free" advice and compete with the industry funds on an equal footing. (To all the purists, I know this is not an ideal solution, but it is time to face reality. ASIC is overcharging everyone to pay their wages, and Industry funds have been given a cost advantage.)

Red tape, regulation and then more red tape and more regulation. But what is the purpose as we are all lost in confusion and frustration, our businesses are devalued, we are told we have to have more education and complete an ethics course. I suggest that the most UNETHICAL lot in politics have hijacked this industry and are determined to hand all of this industry to the large players ONLY. Small advisers will, if they stay run less profitable businesses and their clients will ONLY be those that can afford very high fees.. So maybe the truth of this fiasco is that they not only dont want small business advisers providing advice that conforms to the intention of FOFA but this way if few2er people can afford advice, they get to the holy grail. Playing with peoples lives extracting taxes at will and reducing pensions along the way. balance the budget and look after the mates of politicians. Disgraceful

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