Accountants to face ‘onslaught of disruption’
One industry lawyer has warned accountants of the danger of complacency within the accounting industry, with the number of registered tax financial advisers fast approaching 17,000.
Speaking to SMSF Adviser, DBA Lawyers director Daniel Butler said the latest figures from the Tax Practitioners Board (TPB) indicate that at the end of September 2015, there were 16,743 registered tax (financial) advisers.
Mr Butler said this figure has grown from 16,329 registered tax (financial) advisers as of 30 June 2015.
The deadline for notifying the TPB of the intention to become a registered tax (financial) adviser is 31 December 2015.
According to the Tax Practitioners Board website, AFS licensees and authorised representatives who notify the TPB by this date will not need to pay an application fee. Individuals will not need to meet education and experience requirements and partnerships and companies will not need to meet the sufficient number requirement.
Registration as a tax (financial) adviser means an adviser will “have tax as an arrow in their quiver because it’s another angle they can compete on”, Mr Butler said.
“It certainly does position a financial planner much better with their client because they're legally able to talk tax."
While a financial planner may still face obstacles, in comparison with an accountant, in providing more sophisticated tax advice for businesses and individuals that hold complex trust structures, when it comes to giving tax advice to individuals, financial advisers can now be much more strongly positioned.
“A financial planner now has the capacity to talk tax; what they cannot do today is actually lodge a return, but it’s probably not going to be that hard for a financial planner to bring tax in-house, to then become a true competitor with the accountant,” Mr Butler said.
While both accountants and advisers have made a “a move to the middle”, there are still only 78 approved limited AFS licence applications, based on the latest ASIC figures, he said.
It remains unclear how many accountants have become authorised representatives since there is no real data on this. However, on the figures alone, it appears financial advisers have been quicker in the uptake to gain a competitive strategic positioning, according to Mr Butler.
“A lot of traditional accountants are also suffering another onslaught, and that’s disruption,” he said.
“Even the ATO now does a lot more work on E-Tax so that it’s easier for an individual to lodge their tax return through the ATO and bypass a tax agent.”
This disruption is likely to take the traditional accountant who lodges individual tax returns out of the equation.
“There won’t be a great need for people to be lodging tax returns; the financial advisers can give more rounded advice on investments and lifestyle decisions, and they can also give this tax advice,” he said.
Accountants to face ‘onslaught of disruption’
One industry lawyer has warned accountants on the danger of complacency with the accounting industry, with the number of registered tax financial advisers fast approaching 17,000.
Speaking to SMSF Adviser, DBA Lawyers director Daniel Butler said the latest figures from September 2015 from the Tax Practitioners Board indicate at the end of September 2015, there were 16,743 registered tax (financial) advisers.
Mr Butler said this figure has grown from 16,329 registered tax (financial) advisers at 30 June 2015.
The deadline for notifying the Tax Practitioners Board to become a registered tax (financial) adviser Mr Butler said ends on 31 December 2015.
According to the Tax Practitioners Board website, for AFS licensees and authorised representatives that notify the TPB by this date there will be no application fees payable, individuals will not need to meet education and experience requirements and partnerships and companies do not need to meet the sufficient number requirement.
The ability to become registered as tax (financial) advisers Mr Butler said means advisers “have tax as an arrow in their quiver because it’s another angle they can compete on”.
“It certainly does position a financial planner much better with their client because their legally able to talk tax,” said Mr Butler.
While a financial planner may still face obstacles compared with an accountant in providing more sophisticated tax advice for businesses and individuals holding complex trust structures, when it comes to giving tax advice to individuals, he said financial advisers now have a much stronger strategic positioning.
“A financial planner now has the capacity to talk tax, what they cannot do today is actually lodge a return but it’s probably not going to be that hard for a financial planner to bring tax in house, to then become a true competitor with the accountant,” he said.
While there has been a “a move to the middle” by both accountants and advisers there is still only 78 approved limited AFS licence applications, he said based on the latest ASIC figures.
http://www.smsfadviseronline.com.au/news/13503-asic-reveals-latest-licensing-numbers
While it is unclear how many accountants have become authorised representatives as there is no real data on this, on the figures alone Mr Butler said it appears financial advisers have been quicker in the uptake of gaining a competitive strategic positioning.
“A lot of traditional accountants are also suffering another onslaught, and that’s disruption,” he said.
“Even the ATO now does a lot more work on E-Tax so that it’s easier for an individual to lodge their tax return through the ATO and by-pass a tax agent.”
Disruption he said is likely to take the traditional accountant lodging individual tax returns out of the equation.
“There won’t be a great need for people to be lodging tax returns, the financial advisers can give more rounded advice on investments and lifestyle decisions, and they can also give this tax advice,” he said.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
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