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Accountants joining an AFSL won’t avoid ‘compliance hassle’

Accountants who plan to become authorised representatives to get past the limited licensing hurdle may be overlooking the compliance obligations that a new dealer group will enforce, says The Fold Legal.

According to The Fold, by an accountant becoming an authorised representative (AR) – rather than getting their own limited AFSL – they will not make the associated "compliance hassles" go away.

In fact, while the compliance of an authorised representative largely becomes a licensee's "problem", the dealer group will enforce several measures so as the representative meets their compliance standards, the law firm said.

"The licensee will expect you to use their template documents, which means you could be faced with over-engineered and excessively long FSGs, [and] SOAs, particularly if your licensee doesn't understand the low-risk and limited nature of the strategic advice you provide," The Fold said.

"You'll need to abide by the licensee's compliance policies and procedures – if they're a 'one size fits all' solution that applies to a wide range of ARs, they may not be suitable for an accounting practice. So beware of burdensome and unnecessary red tape.

"The licensee may expect, or even explicitly require, you to refer clients for certain kinds of work," the firm added.

However, while joining an AFSL will entail an accountant having to meet a significant number of requirements, according to The Fold Legal there are still many "benefits" to joining a dealer group.


"[This is especially the case where a] licensee has creatively thought about the needs of accountants under the limited licensing regime and has developed a special purpose tailored regime – rather than bundling you into their existing financial planning compliance arrangements," The Fold said.