One-in-four accountants who are Self Managed Super Fund Professionals' Association of Australia (SPAA) members and not operating under a Australian Financial Services Licence have decided to apply for a limited licence or become an authorised representative of a licensee now, according to Liz Ward, head of education services for SPAA.
On the back of polling done at SPAA events on this issue, Ward said that such numbers were an encouraging sign considering the accountant's exemption would remain in place until 30 June, 2016.
According to Ward, the same polling had also shown another 50 per cent of members who were not licensed accountants were 'seriously considering this option', with only 25 per cent indicating they might not apply for a limited licence or become an authorised representative.
"This is an encouraging trend, especially when you consider the timeline involved," she said.
"Quite clearly, members are thinking seriously about this issue and we would expect many of those considering this option to ultimately commit to it."
Ward said that it was imperative that accountants understand that there are pros and cons in being an authorised representative, as opposed to getting either a full or limited licence directly with the Australian Securities and Investments Commission (ASIC).
She said that there was also the issue of cost.
"There are a range of costs that are being cited; we are hearing that the price to prepare and submit an application for a limited licence may be in the vicinity of $25,000 to $35,000 in the first year," Ward said.
"This includes compliance consultancy fees to compile the application and having all of the components required to support the application in place.
"A DIY approach is an option and could provide cost savings but, like all DIYs, usually results in an increase in the time and input required by the individual," she continued.
"With either approach, accountants can expect to take up to 12 weeks from beginning to end of the application process, and when added to the required RG146 or other types of training programs they need to do initially, the lead time starts to add up."
For Ward, while three years may seem like a long time, accountants have to appreciate that this is a considerable process and one they need to consider carefully and not leave too late.
"In SPAA's opinion, those who elect to be early adopters of the new regime and formally move into the SMSF advice space (via AFSL or authorised representative) are likely to realise commercial benefits compared with those who come to it late," she said.
"We are hearing of a number of accountants who are actively positioning their business based on their SMSF expertise.
"As an association dedicated to SMSF professionals and the provision of quality advice to trustees, we think it is great that there are many accountants who have already formally committed themselves to being in this sector," Ward continued.
"We would encourage those who are thinking, but yet to decide, to research their options, and if SMSF advice is part of their business future, to take the lead and start moving in that direction."
Originally published by SMSF Essentials.
