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FOFA reforms

Future of Financial Advice reforms to restrict accounting advice for SMSFs

Glenn Fairbairn
Director/Private Client Adviser
16 Feb 2012

In recent months there has been a lot of discussion regarding the Governments ‘Future of Financial Advice’ (FOFA) Reforms. The proposed banning of commissions and the requirement for advisers to get retail clients to opt-in (or renew) their advice agreement every two years, from 1 July 2012, has attracted a lot of media attention. However, another hot topic which seems to be growing legs as we fast approach 1 July is the removal of the current ‘accountants exemption’.

The existing exemption allows accountants who do not hold an Australian Financial Service License to provide advice on the establishment of self-managed superannuation funds (SMSFs). However from 1 July the government plans to withdraw this exemption, which could have significant implications on the way that accountants deal with SMSFs. There are concerns from a number of accounting bodies that accountants will need to go through a complicated and expensive process in order to be able to continue to advise on SMSFs.

Consultation is ongoing but according to the Treasury website, the measures discussed by ASIC, Treasury and the accounting bodies to date include ASIC recognising relevant experience of accountants for licensing purposes; granting licences that relate to classes of financial products rather than specific financial products; and providing specific guidance about how a typical accountant might apply for a licence. These are positive steps and we can only hope that a middle ground is reached without further complicating the Financial Services Licensing regime.

SMSFs form a major component of financial and tax planning and in our view it is imperative that Accountants and Financial Planners be involved in this process. Although the FOFA reforms’ main objective is to ensure consumers are protected, the Government needs to be careful not to build up too many barriers for clients to access high quality and cost effective advice.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.