A financial services lawyer has suggested accountants may appear less impartial after becoming authorised AFSL representatives, but could also benefit from working under this model.
The Fold Legal senior lawyer Jaime Lumsden Kelly said accountants providing SMSF advice would need to either take out their own AFSL or become an authorised representative before the ‘accountants' exemption’ for advice expires on 1 July 2016. Ms Lumsden Kelly warned that there arre pros and cons to acting under a third-party licence.In a statement, the Fold Legal lists “potential loss of independence and impartiality in the eyes of your clients” as a possible downside.Other drawbacks include “being bound by the licensee’s approved product list in terms of the products you can recommend”, and “restrictions to acting within the confines of another entity’s licence”, according to the statement.On the other hand, Ms Lumsden Kelly said, there are also positives to working under an existing licensee.“Acting as an AR does avoid the time and cost of the licence application process and also the ongoing management and compliance requirements,” Ms Lumsden Kelly said.“It also means you won’t need to appoint a Responsible Manager to satisfy ASIC that you have the capability to provide your services.”Accountants will also need to decide between pursuing a full financial services licence or a limited advice licence, Ms Lumsden Kelly suggested.“The limited licence allows accountants to give some kinds of general and personal advice on superannuation – including SMSFs – and provide strategic advice on basic deposit products, securities, simple managed investment schemes and general and life insurance.“If accountants want to provide full financial planning advice services, they will need to apply for a full AFS Licence.”Ms Lumsden Kelly suggested there was “no right or wrong answer” for accountants.“The appropriate path will depend on the extent of the services offered and the extent to which independence is important,” she said.“There are plenty of options on offer, so take the time to consider them carefully and seek advice if you’re in doubt.”
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