Guidance

Can your accountant provide SMSF advice from 1 July 2016?

Can your accountant provide SMSF advice from 1 July 2016?

From 1 July this year accountants who wish to continue giving advice to self-managed super fund (SMSF) clients will need to be authorised by an Australian Financial Services Licensee (AFSL).

If you have been relying on your accountant to provide advice for your SMSF, you need to consider these changes and how they might affect the administration of your fund in the future.

Check what licence your accountant has

In the lead up to the 1 July 2016 deadline, a transition period has been in force since 1 July 2013, during which accountants could provide SMSF advice without being authorised.

But from 1 July accountants will have to meet additional requirements to continue advising SMSF clients. There are four paths available to accountants from this date.

  1. They can choose not to become authorised by an AFSL, which means they will not be able to provide any advice in relation to SMSF strategy and investments. Accountants in this category may, however, continue to provide certain services to SMSF clients such as tax accounting and SMSF administration services.

  2. The second path is to apply for a limited licence. Under a limited licence, accountants will be able to recommend clients establish an SMSF and provide advice in relation to existing superannuation fund holdings, for the purposes of establishing the SMSF. They will also be able to provide advice about certain other classes of financial products, such as insurance and simple managed investment schemes, but will not be able to recommend specific products.

  3. The third path is to apply for a full AFSL licence, which would allow the accountant to perform all the tasks covered by the limited licence, in addition to making recommendations about specific investment and insurance products.

  4. Lastly, the accountant could choose to be authorised by an existing AFSL. The AFSL may limit the accountant’s authorisation in line with the second point above.

Regardless of which option they choose, any advice they provide must be outlined in a Statement of Advice and must be in their clients’ best interests.

How to tell if your accountant is licensed

There are a number of considerations you need to make if your accountant is currently your central point of advice for your SMSF. First, you must ensure your accountant is authorised to provide advice.

You can check MoneySmart’s Financial Advisers Register to find out if your accountant is authorised. If your accountant is authorised they will be listed on this register as being able to advise on superannuation. Check the register does not state the adviser is restricted from providing super advice.

The register may also state whether the accountant is accredited as a SMSF specialist by the SMSF Association. This would indicate they specialise in and hold qualifications specific to SMSF advice. The SMSF Association also have a “Find a Specialist” search function on their website.

It’s also an idea to ask your accountant if you can see their letter/certificate of authority from their AFSL, often this will indicate they can provide SMSF advice but don’t rely solely on this as it’s not always the case.

You can also ask your accountant if they have client testimonials for SMSF advice they have previously provided, to ensure they are experienced in this area.

If you are at all concerned about your accountant’s licences and ability to provide advice, it’s a good idea to raise this with them. If your accountant cannot continue to provide advice on your SMSF after 1 July they should refer you to an adviser who is authorised to provide advice to SMSFs.

This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) based on its understanding of current regulatory requirements and laws as at 11 February 2016. This document is not advice and provides information only. It does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement available from the product issuer carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. Colonial First State is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFS Licence 234945.