Accountants at risk of Corporations Act breach
With less than a year left until the Accountants Exemption expires accountants need to know what financial product advice is to understand how not to provide it, a lawyer believes.
Until 30 June 2016 accountants are still able to provide advice on establishing a self-managed super fund (SMSF) without the need for an Australian financial services licence (AFSL).
The Fold Legal's senior lawyer, Jaime Lumsden Kelly, said if accountants are not able to recognise and avoid dangerous client questions that tempt advice answers they could be at risk of a Corporations Act breach when they are no longer exempt.
"Accountants shouldn't be fooled into thinking they can establish SMSFs on an ‘execution-only' basis, without advising clients about suitability of an SMSF," she said.
"While SMSF establishment is exempt, ASIC [Australian Securities and Investments Commission] is likely to scrutinise this activity closely to find accountants who are still recommending SMSFs ‘off the books' or ‘by implication'."
Kelly said a solid referral relationship with an AFS licensee who can provide this advice will go a long way to demonstrate compliance.
She noted that unlicensed or unauthorised accountants are also not able to tell clients requesting SMSFs that it is a bad idea for their situation, as it constitutes as advice.
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