ASIC tips accountants’ departure from SMSF advice

Written by Katarina Taurian Friday, 04 March 2016

ASIC has reported an increase in the number of applications received for a limited licence, but commissioner Greg Tanzer believes many accountants have “changed their business model” for the provision of SMSF advice after 30 June.

Speaking to SMSF Adviser yesterday, ASIC said that as at 22 February, it has received 323 applications for a limited licence. So far, 95 applications have been approved.

The number of applications received since 28 January this year has increased by 47, and the number of applications it has approved has increased by seven.

In a podcast earlier this week, Mr Tanzer said he is confident accountants are well aware of their obligations after 30 June if they wish to continue providing SMSF advice.

“We think that probably a lot of people have decided either not to get a limited licence and actually to operate under someone else’s licence, or that they have changed their business model so that they won’t be advising on establishing or operating an SMSF, but instead they’ll be referring that business to somebody who is,” Mr Tanzer said.

“The key message from us to you is you need to do one of those things. You need to apply for a limited licence in your own right, you need to operate or make an arrangement with a person who has a licence so that you can continue to give that advice, or you need to stop giving the advice and just refer that sort of business to somebody who is licensed to do it,” he added.

“Frankly, if you decide after 1 July to give advice on establishing or operating an SMSF and you don’t have the requisite licence, where you’re not operating under a licence for someone who does, you’re acting illegally. Then you’re joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally.”

Read more:

Perpetual boosts SMSF licensing offering 

Former NAB adviser banned following super dealings 

DomaCom to crowdfund LGBTI retirement income 


Add comment

Security code


0 #23 George Lawrence 2016-03-08 16:37
Dear C Gomes Thank you for the English lesson but you don't have to worry. If you read my initial email I simply mentioned "cash" in all its various forms. Bank deposits, TDs, fixed interest, Government bonds: whatever you like. The point is that cash investments derive interest, shares derive dividends and property derives rent. Accountants do not venture into the world of investment: we merely educate the SMSF trustees on what is available for the fund to invest to meet the sole purpose test. And as far as your colleague Dakka is concerned I am sure that a stockbroker would recommend Government bonds if that is appropriate for the client.
0 #22 George Lawrence 2016-03-08 15:51
Dear Dakka, you got me. Have a good laugh I made an error I forgot government and even semi government paper. 15 love to you.
0 #21 CGomes 2016-03-08 15:48
@ George L. Fixed interest is a term generally used for bonds and like instruments not TDs. And no TDs are not generally what you would call fixed interest investments and no fixed interest is not simply another form of cash being invested. A term Deposit is a term deposit, that's what it is. Just being helpful in the hope of saving some of our accounting brethren from future ongoing embarrassment when they venture into the simple world of investment next time they are directing their clients about what they can do and what is available out there. Cheers
+2 #20 Over rated 2016-03-08 13:56
Tend to agree with George VC in that a majority of SMSF trustees do not want / value FP's advice and how it relates to their SMSF investments. Many are happy to self invest in the market or are happy to let a broker take control of this process. There is no rational reason why accountants needs to "step away" entirely from all things SMSF related post 30/6/16 if they are unlicensed. They do need to straighten up and ensure that advice is not provided, but as for preparation of financial statements, income tax returns and compliance with the SIS act, there is plenty to offer the many thousands of funds that currently have no relationship with FP's. To my knowledge ASIC aren't forcing the hands of trustees to engage FP's yet.
+1 #19 Dakka 2016-03-08 12:05
Oh George!!......A re you kidding me? Tell me you've heard of Government and Corporate bonds..Far be it for me to give you a lesson on fixed interest but there is a big difference between bonds and TDs...oh brother. Get your year 12 Economics text book out or was that year 11 and do yourself a favour. Flavor of the month...flavour of the last 400 years more like. The Poms financed their war against France with Bonds in 1694 (Wiki)or was that TD?? Nah it was bonds. This is the stuff of great humor
0 #18 TD 2016-03-08 11:47
Dream on George.. Language of insecurity we're used to and the rantings of desperation. 4 Corners?..sound s like you didnt watch it or didn't understand it. Deflection away from recognised but less publicised inadequacies has a short life span.....Watch and see!
-4 #17 George Lawrence 2016-03-08 11:44
Dear Dakka, you have to be kidding. Fixed interest is simply another form of cash being invested. Please wake up and smell the roses. Fixed interest is no doubt the flavour of the month so let's all get on the bandwagon. Is a bank deposit of x months term at y% interest not a fixed interest? If not then what is it?
+4 #16 GeorgeVC 2016-03-08 11:18
You FP's keep licking your lips like hungry weasels, thinking the SMSF market is about to be dumped in your lap due to some clever & expensive lobbying by dealer groups.

The Cooper review showed no problem with SMSFs and all SMSFs want to be self directed and use an accountant/ smsf specialist, & most dont use a FP. Thats a fact!

People who set up an SMSF do it to be self directed, which typically means they dont want or value FP's, & probably watch 4 Corners.

However, they do still want guidance & education on how to use their SMSF & obey the many rules & regulations. For that, they need go no further than their unlicensed accountant who can still provide taxation & SIS advice post 1 july 2016.

So move on fella's, it aint gonna be the bonanza you are expecting & ASIC's involvement is not going to change a thing.
+1 #15 Dakka 2016-03-08 10:34
@George...three ways to earn income...mmm actually 4 main asset classes/ways... Fixed interest George. Fixed interest! But we get the picture.
+2 #14 George Lawrence 2016-03-08 10:15
Dear Jimmy, I will give you a real life example. When a client, who asks about how to invest the cash in their SMSF, I tell them that basically there are 3 ways which can earn income. I know that there are variations on a theme (eg managed funds instead of direct shares) but I tell them that the fund can invest in cash, property and shares. I tell them to see a stockbroker for shares, their banker for cash and their real estate agent for property. I don't have any involvement with any of these advisors, I don't receive any fee, I don't recommend any specific investment. I tell them about the tax benefits of franking credits. There is more but I trust that you get the picture. That is advice and education and it is totally independent.
+1 #13 Jimmy Neutron 2016-03-08 09:26
George, but how do you give trusted, unbiased, independent advice if you aren't actually giving advice?
0 #12 Dakka 2016-03-07 11:14
@George..Cough! yeh right...You were the one who made the claim about who people look to for the provision of "independent unfettered advice". Your words! Is that advice your talking about or that other form of advice. They both sound so similar to me but I guess its the advice you get when your not really getting advice hey! Wink Wink...nudge nudge
+1 #11 George Lawrence 2016-03-07 10:49
Dear Dakka, thanks for the comments. What you and everyone else seems to not understand is that, over the years, accountants have not given financial advice. Most have referred clients to a stockbroker, insurance broker, real estate agent etc. for specific investment advice. Accountants have talked to clients in general terms only. The whole current issue is simply and only around SMSFs. And let me ask you something: of all the things accountants will no longer be able to do how many cannot be found somewhere on the internet? Anyone can set up their own SMSF, anyone can download pension documents, anyone can get a mountain of advice from the ATO website? Are these people licensed? And if not who needs them anyway when the client can do their work?
+2 #10 Mark 2016-03-05 18:19
Just wait for the dreaded S33 notice. And ASIC phone calls to clients or blanket remediation letters?

Can your business survive if you are flagged from an employee mistake?
+4 #9 rob 2016-03-05 09:32
This is one of the lamest changes by a parliament and regulator ever. Will the investment scams stop? Will greed cease to be a motivator? And accountants will soon not be able to advise to set up or wind up an SMSF. Ouch, that must hurt (not). The posturing statements directed at accountants by a regulator is offensive (and also laughable)
0 #8 Dakka 2016-03-04 22:59
Ah! the trust myth. At a media level and in the heads of insecure accountants it exists. Not on the radar or in the minds of clients who choose the professional advice of a qualified financial planner. The dilusion below about the source of advice being Accountants because they are trusted is not only a falacy but reference to activity not allowed by law without a license. That fact will sink in one day maybe. It's this thought process/delusio n that has led accountants down the path they are now on. Welcome to licensing and have a nice day.
+3 #7 George Lawrence 2016-03-04 16:58
People who have an accountant will always go to him or her for advice simply because they are trusted. The accountant will do whatever he or she can to stay within the boundaries and they will outsource what they cannot do. The point is that accountants will NOT be irrelevant and FPs had better get used to that idea. The really relevant comments are about the professional associations: they have acted abominably and have let everyone down. They took the wrong approach and lost the fight (whatever little fight they put up). Hats off to the FP lobby: they have won the battle but not the war. Just ask the clients: who do they trust for independent unfettered advice? The answer is obvious. I haven't put my head in the sand but I have sought an association with a FP who will give the advice. Client talks to me, I discuss the generalities and FP does the financial advice. Simple, isn't it.
+1 #6 TD 2016-03-04 15:53
Concerned...i think you have joined the dots and come to an illogical conclusion/whin ge. The bar is not high. Few applications doesn't automatically suggest the bar is too high. Perhaps it just suggests that Accountants by and large aren't that bothered or have plenty of other stuff to do at the moment or choosing a different method of delivery. Out of 10 Accountants in our practice 1 has chosen to get a limited license as she is the one who deals primarily with SMSFs and she suggested its pretty straight forward yet enlightening. Oh the logic!!
-3 #5 concerned accountant 2016-03-04 14:57
Quoting TD:
Concerned has the bar been set high? Its only a very limited version of what FPs currently have to do. .

Simply - If the bar wasnt set as high there would have been more applications. Or do you have trouble understanding simple logic?
Also, this isnt to become a full FP licence, so what relevance is it as to what FP's have to do??

And I notice no comment as to how easy it is for FP's to become limited tax agents.

The difficulty level for tax agents and FP's to obtain the respective LIMITED licences should be equivalent. Clearly it is not. Hence the massive imbalance in approved numbers ie 15,000+ v 95.

The FP lobbyists need to be praised for achieving their aims. The accounting representatives let their members down.
+4 #4 Scott 2016-03-04 14:34
About half of the accountants I talk to are simply working on the basis that if they make everything client directed there won't be a problem and that ASIC won't enforce the changes. It is a definite head in the sand approach and it will take a head on a platter for this to change.

Straw Poll

Has the budget affected your ability to advise your clients on super
  • Votes: (0%)
  • Votes: (0%)
Total Votes:
First Vote:
Last Vote:

Latest Columns

Latest Comments

  • ASIC drills in warning to accountants

    Chris you sound like the old planners 20 years ago when FSR first hit and they had to actually put their advice in writing, they too had the mantra ...
    25 May 13:12  
  • Lenders still ‘dialling down’ on LRBAs

    Given the limits on LVRs and liquidity restrictions, the downside risks to LRBAs are limited. Without the benefit of SMSF Loans crystal ball, who's to ...
    24 May 18:11  
  • ASIC drills in warning to accountants

    " joining the club with the investment scammers, the property spruikers, and all of the other people who choose to operate illegally" Yeah, it's great ...
    24 May 12:13