ASIC has announced it addressed a regulatory anomaly that is intended to place full AFSLs on the same footing as limited licensees, but not everyone agrees it goes far enough.
According to a statement yesterday, the regulator has amended the ASIC Corporations (Recognised Accountants: Exempt Services) Instrument to allow full AFSLs to provide exempt tax advice in relation to products not covered by their licence.
Regulation 7.1.29(4) enables a person to provide advice on taxation issues, including advice in relation to the tax implications of financial products, without an AFSL, ASIC said.
If the tax advice is also financial product advice to a retail client, this exemption is only available if accompanied by a written warning which states, among other things, that the person providing the advice is not licensed to provide financial product advice.
The instrument was created to allow limited licensees to rely on the exemption, since they could not write a warning that they were not licensed.
Full licensees, however, also encountered this problem, ASIC said.
The amendments to the instrument provide a modified warning, which states that:
• The person providing the exempt advice does not have the authorisation to provide this advice;
• Taxation is only one of the matters that must be considered when making a decision about a financial product; and
• The client should consider taking advice from an AFSL with the appropriate authorisation before making a decision about a financial product.
“These amendments put full AFS licensees (and authorised representatives of full AFS licensees) with limited authorisations on the same footing as limited licensees (and authorised representatives of limited licensees) with regard to being able to provide exempt advice under regulation 7.1.29(4),” ASIC said.
However, SMART Compliance principal Brett Walker believes this amendment is “not much help” for AFSL holders.
“It still means that if you have (e.g.) superannuation on your AFSL, you can’t rely on the exemption to say you are just talking tax consequences (and hence don’t need to provide SOA),” he said.
“It still means accountants who are not licensed get more than their licensed competitors.”
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