Accountants servicing self-managed superannuation fund (SMSF) clients are likely to be most adversely affected by the government’s decision to increase Australian financial services licence (AFSL) fees.
The change was announced in Tuesday night’s budget and could mean a price hike of as much as 420 per cent price for some AFSL application fees.
While this change was announced, a new licensing scheme for SMSF accountants is still being formulated as a replacement for the now defunct accountants’ exemption.
The expected outcome being accountants will have to apply for a lower level of practitioners licence if not a full AFSL.
In turn this will mean a large number of accountants will potentially incur the cost of both the higher level of application fee and higher annual lodgement fee.
“You are left wondering what impact that will have in terms of the accountants’ exemption,” Institute of Chartered Accountants in Australia head of superannuation Liz Westover told InvestorDaily.
“If it turns out that accountants need to be licensed in some form through ASIC that’ll be a huge cost imposition for them.”
Macquarie Adviser Services executive director David Shirlow agreed, stating the move could have the most significant impact with SMSF practitioners.
“I thought that was pretty interesting in the context of the whole accountants debate because the accountants are very much concerned about the cost of licensing and one of the key things was to get that cost down as much as possible,” he said.
“While there are other expenses involved the cost of the licence itself is important and it would seem as if the standard licence costs are going up and that’s not going to go down too well.”
The 2012 federal budget contained a proposal for AFSL application fees to jump to $1485 from a current level of either $287 or 575 determined by the application method.
Similarly annual lodgement fees are also set to rise from $351 to $549 for a body corporate and from $144 to $225 for individuals.
The rationale behind the price hikes was to offset some of the additional $23.9 million funding allocated to ASIC for the implementation of the Future of Financial Advice reforms.
