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The COVID-19 crisis could present a silver-lining opportunity for the joint accounting bodies to turn up the heat on the licensing regime, following ASIC’s temporary AFSL exemption for tax agents.
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Joint bodies look to capitalise on ASIC’s licensing ease
14 May 2020
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12 minute read
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Last month, the corporate regulator relaxed licensing requirements for accountants to provide advice to existing clients about the early access super scheme.
The sudden move by ASIC came in response to a sharp interest in the scheme, with the latest figures revealing that over $10.6 billion in super funds have now been released to 1.29 million applicants.
However, the joint accounting bodies — namely Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia and the Institute of Public Accountants (IPA) — have publicly campaigned for more, arguing that the current regulatory framework has restricted accountants from providing holistic advice.
ASIC’s appetite to ease licensing requirements, and an economic downturn that will likely see clients lean in for trusted advice, has now presented an opportunity for the joint bodies to push their case further.
“There’s a bit of movement there and we’ll keep batting away at that issue because my association and the other major accounting associations really understand that accountants are a trusted adviser and it really is difficult just to stop mid-sentence and say, ‘I can’t talk about that’,” said CA ANZ tax leader Michael Croker on Accountants Daily Live.
Likewise, the IPA’s Tony Greco is optimistic that ASIC’s announcement will pave the way for deeper discussions with the government in the near future.
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“It was a seismic shift in ASIC’s thinking because FoFA (Future of Financial Advice) had basically locked accountants out from any financial advice, and now, all of a sudden, ASIC’s resistance to getting accountants back in financial advice is being put on the backburner,” Mr Greco said.
“If you want to increase accessibility to affordable financial advice, I think this is a serious issue for accountants because that’s where the public goes to for tax advice and it seems silly not to open up the channel.
“There’s got to be some rigour around it, we acknowledge that, but we’re not about advice on products or product sellers, we’re about strategic advice and there’s definitely a huge need for affordable and accessible advice right now.”
With tax time fast approaching amid the COVID-19 situation, Mr Croker believes the dilemma of not being able to talk flexibly with clients will be felt by accountants more than ever.
“I’m a tax nerd and I know I can prattle on a whole host of tax issues, but I think what my clients really want to see this May and June is an empathetic conversation which understands the impact that COVID-19 has had on their business, their personal wealth strategy, their retirement strategy and someone they can trust to have a really detailed conversation with across a range of topics,” Mr Croker said.
“But we have the obvious issue of when do I stop being a tax agent and when do I start entering into the area of financial advice?
“A holistic approach is really important.
“We think there is more work that needs to be done on this practical wisdom that accountants have, and they should be able to share that more readily with their clients across a range of topics.”
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