Accountants walk advice tightrope

Many accountants are unaware of what constitutes unlicensed advice, meaning they are often unwittingly treading the fine line between what they can and can’t discuss, according to lobby groups within the profession.

The Institute of Chartered Accountants in Australia (ICAA) and CPA Australia revealed this to Money Management after the Australian Securities and Investments Commission (ASIC) announced that it would be investigating unlicensed superannuation advice, with a particular focus on accountants.

This follows the discovery that 14 accountants gave advice illegally on issues that require an Australian Financial Services Licence (AFSL) in ASIC’s shadow shopping survey on superannuation advice.

ICAA manager of financial services and superannuation Hugh Elvy said he often received enquiries from accountants regarding their advice boundaries.

“There is still a lot of grey area, as some of the areas within Financial Services Reform [FSR] are not clear,” he said.

“The rules and regulations have a certain level of interpretation to them. So refinements are going to be an ongoing issue.”

CPA Australia financial planning technical adviser Belinda Robinson said the line between what accountants could and could not discuss was “very fine”.

“All accountants who are members of professional accountancy bodies are able to talk about setting up a self-managed super fund … but they can’t talk about the amount which should be put into super,” she said.

“And so much of super is based on tax, which accountants can give advice on, so the line is so fine.

“Ongoing changes and refinements are something we are working on with ASIC to ensure FSR is as workable as it can be for clients and planners.”

Speaking about the accountancy profession as a whole, Count Wealth Accountants compliance manager Melissa Carroll said the advice boundaries were “hazy”, and accountants were sometimes unaware they were overstepping them.

“I think part of the problem is that accountants were always allowed to do certain things, but with FSR, those boundaries have been changed, and it takes time to understand those changes,” she said.