“It is a fantastic opportunity for advisers. There are about 40,000 practicing accountants in the Australian market and the Government is only talking about potentially a quarter of those moving down the advice path,” MLC Accountants Solutions national manager Nick Hilton today told InvestorDaily.
“Therefore there is going to be three quarters looking for referral arrangements and other associated services with financial planners so that they can continue to provide advice to their own customers.
“Of the 10,000 that are going to give advice, it’s still on a ‘class of product’ license only. So there is an opportunity for financial planners working with the actual accountants to deliver that product advice that is missing,” he said.
Accountants have a transition period of three years to meet requirements for advice. Early adopters – around 10-20 per cent looking to move in the first year or two – typically have self-managed super funds (SMSFs) as a significant part of their business.
The options available to accountants who want to advise SMSF trustees under the new regime include getting their own license, becoming and authorised representative of a licensee or entering into a referral arrangement with an appropriately licensed person.
“The critical elements for accountants is [to] know there is a transition period and. a transition period has been given for a reason,” Mr Hilton said.
“The things they should be doing [now] is exploring the various options available to them. If they are going down the licensing path, work out what level of licensing they going to go down? If they are choosing not to do that, then how are they going to execute any referral or joint venture arrangements.
“Licensing also requires education so they also need to think about that,” he said.
On Friday, MLC released a survey showing that 75 per cent of accountants want to deliver financial advice to clients under the proposed new licensing regime.
The survey also found that of the accountants that want to deliver financial advice, 67 per cent would like to do so in house.
MLC surveyed more than 200 accountants during its MLC accountant seminar series to help accountants who advise on SMSFs navigate the changing legislative environment.
The Future of Financial Advice (FOFA) reforms mean that, in the future, these accountants will have to gain a ‘class of product’ Australian Financial Services Licence (AFSL).
