Accountants should be cautious when selecting AFSL, broker says

Accountants should seek expert advice and undertake comprehensive due diligence when considering the best AFSL framework that maximises the potential value of their practice, Connect Financial Service Brokers chief executive Paul Tynan says.

Mr Tynan's comment is in response to the accountants' exemption, which allows accountants to give advice on SMSFs, coming to an end on 1 July 2016.

Mr Tynan said accountants who select the wrong licensee could face risks to their future business opportunities and retirement objectives.

"Some licensee agreements have very strict client ownership stipulations, especially those by licensees that operate within the big four major banks, AMP and IOOF," he said.

According to Connect, many accountants were shocked to learn of client ownership requirements whereby the adviser might own the revenue stream but cannot sell to their clients outside the licensee group.

Mr Tynan also said that a long-standing myth in the advice industry around the difficulties in obtaining and maintaining and AFSL is exactly just that – a myth that has been perpetuated over the past 30 years.

He pointed to specialist organisations offering ongoing compliance, training, administrative and related services in assisting accountants and financial advisers with their AFSL applications.

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