Accountants make last stand on super advice

The accounting profession has made a last-ditch attempt to provide at least a small measure of advice under the Financial Services Reform Act (FSRA).

TheInstitute of Chartered Accountants in Australia(ICAA),CPA Australia, theNational Institute of Accountants, and the Tax Institute of Australia have entered a joint submission to the Joint Parliamentary Committee on Corporations and Financial Services on the issue of Superannuation Fund Structure Advice.

They are fighting the Federal Government’s position that any recommendation on the suitability of specific superannuation structures requires an FSR Licence due to the opinion by Government that they are financial products.

The ICAA submission, entered last week, says the association does not agree this interpretation by the Government is within the spirit of the Wallis Report, which resulted in the FSR regime.

It says accountants giving fund structure advice are not recommending particular funds or investments, so should not be seen to be giving financial product advice which would require an Australian Financial Services Licence.

If the FSR Regulation 7.1.29 goes through intact, accountants will only be able to provide factual information on types of superannuation fund structures, but would be unable to advise the client on which one is most appropriate.

ICAA technical adviser Keith Riley hopes that this element of the regulation will be “tidied up”, as it would be confusing for clients, and an annoyance for accountants.

Riley says that although the association believes the regulation should go through for the benefit of the industry, he says this section should be amended, as a client will not lose or gain money as a result of this type of advice.

The committee is required to report to Parliament by June 24 on the issue, and if it is not satisfied with the regulation, it could be sent for further amendments to the Senate.