The Self-managed Independent Superannuation Funds Association (SISFA) has warned that further special regulatory treatment for accountants giving advice to SMSF clients would lead to poor outcomes for consumers, as the joint industry body working group gears up to take a proposal for a reformed licensing framework to government.
SISFA managing director Michael Lorimer told SMSF Adviser that bringing back any form of exemption for accountants giving advice around certain aspects of SMSF set-up and management was unnecessary and “fraught with danger”, as it could see unscrupulous operators taking advantage of perceived loopholes in the law.
“To try and attempt to have relaxation of rules or carve-outs to certain segments or professions is fraught with danger and people will abuse that, either deliberately or in blissful ignorance,” Mr Lorimer said.
“In all facets of law, the more exceptions to the rule you have, the more anomalies you get, and at the end of the day, is [that law] really achieving its objectives? I think the overarching outcome from anything has to be what’s going to achieve a regime that creates the best outcomes for end consumers.”
Mr Lorimer said while he commended the accounting and SMSF industry bodies for taking a “blank canvas approach” when it came to reform of the advice framework, he was not convinced the current system needed to be drastically changed given that accountants could comfortably assist clients on a number of issues without needing a licence.
“If you look at ASIC’s Information Sheet 216 which talks about licencing requirements for accountants, it goes to some lengths to set out in plain terms that compliance services in relation to SMSFs can be provided without the need for a licence at all,” he said.
“There would be a significant number of accountants who were previously relying on the old exemption [to provide SMSF services] and would have found no need to do so if they had a guide like this in place at the time.”
Among the services ASIC listed as permissible for accountants to provide without a licence included tax advice on SMSF investments, tax agent services related to the fund, and advice provided for the purposes of compliance with super legislation, such as informing a trustee of the contribution caps available to them.
“Advising a trustee on the administration of a pension, for example, doesn’t require a licence — drawing a distinction between how a pension operates or can be put in place versus recommending to somebody that they start a pension from their SMSF, that is where the line is,” Mr Lorimer said.
“If the client is asking the accountant the sort of question that requires advice and they don’t hold the appropriate authorisation, that’s the point where a person who is appropriately licensed is brought into the room, and I don’t think there’s anything wrong with that.”
The comments come following the establishment of a working group between the accounting and advice industry bodies and the SMSF Association, with the aim of reforming and simplifying the current advice framework.
Speaking at a Pritchitt Partners event last week, SMSFA chief executive John Maroney said the groups were working through a blueprint to take to government around a more workable advice model that would also aim to provide a level playing field between accountants and advisers.
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