ASIC has found key knowledge gaps with limited AFSL holders who were uncertain about their compliance obligations, including what documents must be provided to clients when giving SMSF advice.
Between 2016 and 2017, ASIC visited 20 AFS licensees to assess how they were operating under the new limited licensing model, which was introduced as result of FOFA and dictates that accountants who want to provide financial advice must do so under a limited licence.
In a statement today, ASIC said that although most of the licensees were still establishing their businesses under the new regime, only half the licensees had provided advice at the time of the regulator’s visit.
ASIC found that where licensees had not yet provided advice about SMSFs they were uncertain about what documents they had to provide to clients, the content of those documents and when they had to be provided to clients – including the requirements around giving a statement of advice.
ASIC said it identified that licensees were uncertain about ongoing compliance obligations specifically with regard to the resources required to monitor compliance and what steps were required to comply with their general licensee obligations.
There was also confusion about what information must be uploaded to the Financial Adviser Register. Nearly half the licensees had not updated the register with adviser information, ASIC said.
The licensees ASIC visited indicated they were actively seeking training and assistance and ASIC said it will soon provide further guidance on its website.
Recently, a consulting firm predicted that ASIC will abolish limited AFSLs due to their implementation issues and scarce take-up in the industry. ifa has also reported that licensing is a low priority for accountants.
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