Sitting tight on the accountants' exemption replacement

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Key Points

  • Chartered Accountants should hold off on making business decisions prior to a resolution on the accountants’ exemption
  • The decision will form one of the final pieces of the government’s Future of Financial Advice (FoFA) reforms
  • Tranche 1 and 2 of the government’s FoFA recommendations has been referred back to the original parliamentary joint committee.

Chartered Accountants are advised to refrain from making business decisions in the absence of details which are yet to be finalised on a suitable replacement to the accountants’ exemption. 

This will be one of the final pieces in the federal government’s Future of Financial Advice (FoFA) reform package and follows Tranches 1 and 2, announced in September and October respectively.
 
The Institute’s Head of Financial Advisory Services, Hugh Elvy, says while it’s understandable members are anxious to start planning for the anticipated changes, decisions made without full knowledge of the new framework could prove erroneous.
 
'While the process is taking longer than we would have liked, it’s important not to base any decisions about the long-term future of your business on assumptions or rumours. We will advise members as soon as the government’s proposed solution is finalised,' Mr Elvy says.

FoFA Tranche 1 and 2

The Bills for tranche 1 and 2 of the government’s FoFA recommendations have been referred back to the original parliamentary joint committee (PJC), which examined Financial Products and Services in Australia. The Senate has called on the PJC to reassess the draft legislation.

The Institute has submitted its response to the concerns being addressed by the PJC, which discusses opt-in and annual disclosure. We will also be making submission on the second Bill.

Article last updated 21 October 2014

Comments on this article

  • Shane Ryan 24 Feb 2012 9:40am

    Firstly I agree with everyone else's posts. However the writing appears to be on the wall. Thinking a bit laterally here, if the regime heads the way it looks like it could, why couldn't the ICAA obtain a license and allow members to operate as Proper Authorities (ie offering advice in the areas they are already qualified and experienced to cover)? I've had various large Financials approach me with licensing packages that would fit the bill but they want to charge $5k plus for the service. A limited PA could be offered as an additional option in the ICAA's membership subscription at a fair cost.

  • Shane Ryan 24 Feb 2012 8:57am

    Firstly I agree with everyone else's posts. However the writing appears to be on the wall. Thinking a bit laterally here, if the regime heads the way it looks like it could, why couldn't the ICAA obtain a license and allow members to operate as Proper Authorities (ie offering advice in the areas they are already qualified and experienced to cover)? I've had various large Financials approach me with licensing packages that would fit the bill but they want to charge $5k plus for the service. A limited PA could be offered as an additional option in the ICAA's membership subscription at a fair cost.

  • David Garry 20 Dec 2011 12:14pm

    I agree with the above comments. My take on it is that the legislators are trying to codify for the protestion of the consumer. That seems like a noble cause and worthy of pursuit. However, we the front line advisors and operatives who spill our blood, sweat and tears for our beloved clients at the coal face of small business in Australia, must be protected from the blinkered behemoth of beauracracy. Their good intentions will have us and our clients shipwrecked and awry. We must ensure to cut a clear swathe of sense through this triffid like FoFA before it is too late. It is often hard to protect our clients from wrong decisions when the mighty advertising dollar of the gargantuan financial product providers infiltrates and influences the otherwise sound thinking of good hard working people. I wonder if they (politicians) can see the wood for the trees, and because I doubt so, I have no choice but to live on in hope and prayer. David K Garry CA

  • George Lawrence 9 Dec 2011 6:44pm

    This has gone on for far too long and it is getting ridiculous. The so called accountants exemption was carved out to enable accountants to assist clients to set up a self managed super fund. No more no less. This was due to the fact that superannuation was classed as a financial product in the Financial Services Reform Act. Most accountants I know do not want to do formal financial planning or advising (even though most of the people in that industry are useless and are simply selling products recommended by the dealer group to which they belong: has anyone ever seen any plan which has anything other than managed funds as recommended investments? Gee, I wonder why?) but they still want the right to assist clients to set up a SMSF. I can't for the life of me see how helping set up a SMSF can be classed as dealing in finance. By the way most of us know that a client can go to the internet, order a shelf company and a super fund. This would take around 10 minutes: I haven't heard anyone complaints that these providers are dealing in a financial product yet we accountants are accused of doing so. What a joke! The ICAA must not, repate MUSTNOT, buckle under the pressure being exerted by the financial planning industry and fight tooth and nail to ensure that accountants retain the right to advise our clients in what is best for them. If this fails, what next? Will we be prevented from advising a client that they should set up a limted liability company to run their business? Yours truly George Lawrence FCA Bowral NSW.

  • Jahangir Hossain 9 Dec 2011 2:22pm

    I completely agree with Michael

  • Michael Trehy 7 Dec 2011 10:41am

    Hi all, It is SO important that the Institute and members continue to lobby for a replacement to the accountants exemption to enable members to continue effectively advising in relation to clients' financial affairs. I see so many clients receiving poor quality, ill informed non-wholistic advice from so called Financial Planners who are not in possession of all relevant client history and information, simply because they have an FSL, whilst eminently better informed and qualifed accountants are being manacled in their attempts to advise clients by poor knee-jerk legislative reform. Please continue the good fight to allow us to advise effectively! Mike Trehy CA

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