FOFA likely to drive accountants closer to financial planners
Restoring accountants' licensing exemption is a positive development that will drive accountants and financial planners closer together, according to Patron Financial Advice general manager Robert McCann.
McCann has claimed that while many financial planners have moved to ensure they are ready for the Government's Future of Financial Advice (FOFA) changes, the new regime is likely to have a much bigger impact on accounting firms who are currently prohibited from providing financial advice without gaining appropriate accreditation under an Australian Financial Services License.
Further, he pointed to the fact that from June next year the current exemptions for accountants will be scaled back, limiting them to providing only strategic financial advice and requiring them to work alongside licensed professional financial planners on product and asset allocation.
"In 2003, changes to the Corporations Law saw accountants lose the ability to provide any financial advice that they were traditionally able to give clients - advice that simply related to tax planning and basic commonsense stuff that was always part of the relationship between an accountant and a client," McCann said.
However he acknowledged that many accountants stretched this financial advice into areas of product about which they had no knowledge, although he believed most were just trying to do the best thing for their clients.
"It is my view that giving accountants back the licensing exemption is a good thing and will drive both professions closer together - where at present many accountants and financial planners butt heads over client control issues," McCann said.
He said he believed there was a role for both accountants and financial planners, remembering that the objective was the good of the client, not who earned the most fees.
Accounting firm Chan and Naylor, which has a partnership arrangement with Patron, has pointed to the value of the arrangement in the new environment.
The accounting firm's head of financial planning, David Hasib, said creating a separate licensing regime for accounting firms would create disjoined services, problems with compliance and general confusion among consumers.
AUTHOR
Mike Taylor
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
