Licensing can boost accountants' revenue
By becoming licensed to provide financial advice, accountants will be able to charge clients for advice they are currently "giving away for free", says head of SMSF Advice Kath Bowler.
"For years because of the way in which the [accountants'] exemptions have been structured, accountants have largely been giving away advice for free," she said.
Existing regulation prevents accountants from charging for services that are provided under the exemptions, Bowler said.
"With licensing they won't have to stop at a point too soon. And the licensing will mean they can now charge appropriately for advice," Bowler said.
"Certainly there's going to be a cost to moving into licensing, but the opportunities will be far greater in terms of servicing and revenue," she said.
Bowler is the head of the AXA/AMP licensee SMSF Advice, which offers accountants three different levels of financial services licensing.
The 'basic' level is for accountants "who want to continue to recommend self-managed superannuation funds (SMSFs) when the accountant's exemption gets removed, as well as provide some basic contributions advice", said Bowler.
The 'strategic' level is for accountants who want to provide advice without having to get involved in product selection and portfolio management, she said.
Finally, the 'comprehensive' solution is aimed at accountants and SMSF professionals who want to deliver comprehensive financial advice, Bowler said.
"The basic option starts at $5,500, the strategy option is $13,500 and the comprehensive option is $18,500. This is the price for the first adviser. There is a considerable reduction in price for the second and subsequent advisers within the same practice," she said.
The strategic and comprehensive options are receiving the most interest, since accountants have been "holding back" on the basic option in anticipation of the Government's decision about the replacement to the accountant's exemption, she said.
"The limitations of the existing exemptions, and the need for alternative licensing options such as ours, have been reinforced by the announcement on the weekend of the limited licence for accountants, allowing accountants to obtain a licence so they can provide advice in relation to SMSFs and non-product strategic advice," said Bowler.
"[There are an] increasing number of accountants looking at this space. It's about a full range of licensing solutions, not just a solution to address the removal of the accountant's exemption. It's a much wider strategic position," Bowler said.
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