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The perceived loss of independence is an issue for accountants looking to become licensed in the new SMSF licensing regime, according to one lawyer.
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Accountant independence key issue in SMSF licensing
28 October 2014
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Speaking to AccountantsDaily’s sister publication SMSF Adviser, Claire Wivell-Plater, owner of legal firm The Fold, noted there are downsides to accountants acting under a third-party licence, including the potential loss of independent status in the eyes of clients.
These are particularly pertinent for accountants because they’re typically accustomed to being able to operate as they choose, subject to the confines of professionalism laid down by their industry organisation.
“When you’ve got your own licence you can set your own policies around what it is, how you want to service your clients, what services you want to offer, the way in which you offer those services,” Ms Wivell-Plater said.
“But when you’re an authorised rep of a licensee, because they’re responsible for everything that you do, their way of managing that is to set out and document policies and procedures for the way they require things to be done.”
Ms Wivell-Plater also touched on the potential issues associated with a licensee’s approved product list.
“The licensee provides you with an approved product list, and generally speaking you’re not allowed to use products that are not on the list without their approval. Often you can get approval to use other products, but you have to go through a process doing that.”
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Also speaking to SMSF Adviser, executive director of Crystal Wealth Partners John McIlroy said accountants are typically “independent thinkers” and wouldn’t want to be seen to be product pushing for their licensee.
“Accountants generally like to be seen in their clients’ eyes as being an independent party,” Mr McIlroy said.
Mr McIlroy also said accountants are unlikely to join bank-aligned licensees, citing potential product restrictions and cultural differences.
The Fold stressed that “now is the time” for accountants to decide whether or not they are going to pursue an Australian Financial Services licence, with the accountants exemption expiring on 1 July 2016.
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