“The regulations will also benefit thousands of small businesses by creating a significant opportunity for up to 10,000 accountants and the estimated 18,000 financial advisers who wish to grow and diversify their business,” Mr Shorten said.
“Collapses such as TRIO highlight the need for investors to fully understand the alternatives before changing their existing superannuation arrangements. This new licence means licenced practitioners will advise on a wider range of alternatives, rather that limiting their advice to the establishment of a self-managed super fund.”
“By giving financial services practitioners the opportunity to expand their businesses, consumers can expect greater competition in the market and therefore more competitive prices.”
“Today’s announcement is a win-win.”
As part of the Government’s “Future of Financial Advice” reforms, a new limited Australian Financial Services Licence (AFSL) was announced. This replaces the current accountant’s exemption and will see up to 10,000 accountants become licensed and able to provide a much broader range of financial advice than they were previously able to.
The reforms also extend the consumer protection provisions of the Corporations Act, such as the best interests duty in the recently passed Future of Financial Advice reforms, to financial advice provided by accountants
The draft regulations give effect to all aspects of this reform announced by Minister Shorten on 23 June 2012 (link), including:
- in addition to being able to advise on self-managed superannuation funds (SMSF) and superannuation generally, licence holders will be able to give “class of product advice” on basic deposit products, general and life insurance, securities, and simple managed investment schemes;
- streamlined experience requirements for accountants who hold a practicing certificate issued by one of the professional accounting bodies (the Institute of Chartered Accountants in Australia, CPA Australia Ltd and the Institute of Public Accountants); and
- an exemption from the audit requirements for limited licence holders who do not handle client money and instead submit an annual compliance certificate.
“I am also still considering whether other professional qualifications could also form part of the streamlined arrangements, for example, practicing certificates issued by the SMSF Professionals’ Association of Australia,” Mr Shorten said. “In addition to feedback on the draft regulations, I invite submissions to address this issue.”
The draft regulations and draft explanatory statement can be found on the Treasury website: http://futureofadvice.treasury.gov.au
Submissions on the draft regulations close on 21 December 2012.
Minister Shorten Media Contact: Jessica Lindell 0408 642 804