Don’t rely on ASIC’s leniency, accounting body warns

Written by Katarina Taurian Tuesday, 08 March 2016

With reports that ASIC is already shadow shopping, those accountants hoping ASIC will take a light enforcement approach to the new SMSF licensing regime after 30 June this year are putting themselves in the regulator’s firing line, one accounting body has warned.

While ASIC can traditionally be “a little lighter” in terms of enforcement at the beginning of a new regime, accountants should not be relying on any form of grace period once the accountants’ exemption expires on 30 June, the Institute of Public Accountants' executive general manager – advocacy and technical, Vicki Stylianou, told SMSF Adviser.

She noted there has been an extensive transitional period for accountants to get their licensing arrangements sorted, with The Future of Financial Advice (FoFA) reforms effectively being in the works for six years.

“If you get any kind of leniency then you’re lucky, but definitely do not rely on it and be as prepared as you must be come 1 July,” Ms Stylianou said.

“It is really going to be crunch time come 1 July,” she said.

Ms Stylianou echoed ASIC’s sentiments, and believes there will be a substantial portion of the accounting community who will exit SMSF advice.

“There’s a lot who have decided they don’t do enough of them, so it’s not worth beefing up or staying in, so they’re just going to exit,” she said.

Late last week, ASIC 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.

“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.

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+4 #2 GeorgeVC 2016-03-08 10:31
Mr Tanzer, you patronise over 1M self directed SMSF trustees saying they can't "operate" their SMSF without a financial planner. As the Cooper Review found, the SMSF sector was already well run.
Post 1 July 2016, an accountant without a licence can still provide:
1. Factual advice on SIS compliance,
2. Taxation advice, incl. contribution caps & pension limits & tax on pension funds,
3. Traditional SMSF accounting services, auditing,
4. Execution only services on behalf of smsf trustees such as minutes resolutions implementing the trustee's own instructions. The vast majority of SMSF trustees just want help to understand the SMSF that Aust law allows them to have, be self directed on investments & operate within the rules. Accountants can continue to provide these SMSF services without licensing. If ASIC wants to take on the entire accounting profession over "factual advice" & "execution only" services, you will have your work cut out for you indeed!
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+5 #1 concerned accountant 2016-03-08 09:09
Hey
I wonder if some authority will start "shadow shopping" for bribery of politicians, police or planning department employees.

Its a pity that "entrapment" is not illegal in australia.

Normal law enforcement follows a specific process. (1) commission of a crime (2) Complaint from a victim (3) investigation (3) prosecution.

Where there is no complaint from a victim, why are public servants wasting time and taxpayer money, by starting investigations? ? There are enough real criminals ripping people off out there to keep these investigators busy.

All this to enforce legislation that has all the hallmarks of an amazing restraint of trade, which acts to stop thousands of PROFESSIONALS from doing what they have been doing well since the introduction of SMSF's. - The lack of victims complaints against accountants in the past shows this.

And to think the Liberals promote themselves as the govt that reduces red tape.......
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