For many years now, Accountants have been operating in financial services (eg. Advice about SMSFs) in a sort of limbo. They were allowed to give limited advice under an exemption in the Australian Financial Services License (AFSL) regime. The problem with this arrangement for the Accountant, was that the exemption was actually very restrictive, virtually to the point of not being able to effectively advise clients at all. If they stepped outside the exemption parameters, they left themselves open to prosecution.
The Australian government has announced a new regulatory framework for Accountants wanting to offer non-product strategic financial advice. The new regime will transition into effect over a period of 3 years, starting from 1 July 2013. In the meantime the existing exemption rules will also continue to apply.
The new regime will allow Accountants and other advisers to apply for a conditional AFSL. It is believed this license will allow Accountants to advise on SMSF related structural matters as well as 'class of product-level' advice on superannuation products (switching from one to another type of super), simple deposits (what sort of product is most suitable given the investment timeframe), insurance (what sort of insurance the client needs to have and the structure for holding it), simple managed investment schemes (cash funds versus equity funds) and securities (are shares appropriate given the clients circumstances). So class of product advice covers strategic advice, but not specific product recommendations.
The new regime certainly doesn't give Accountants a back door entry into offering a full range of financial product services. However it should provide a greater certainty that they can offer the services their clients come to them for. It has been a nonsense for many years that, for example, an Accountant could set up an SMSF but then not talk about the use of pensions and contributions within the broader tax planning function with clients. Why, because contributions into a specific fund, or the commencement of a pension are financial product advice and outside the scope of the current exemption. I suspect many Accountants did this anyway, but it left them exposed under AFSL should the authorities choose to enforce the law. The new regime will hopefully fix this kind of nonsensical limitation.
