Accountants' RG146 Transition Programs - to do or not to do?

    There is still a lot of confusion out there in the market place about what Accountants will and won't be able to do post 30th June 2016, what RG146 training they do or don't need, and what options they do and don't have in transitioning their business as we head towards the 30th June 2016.

    Rules from 1st July 2016 - limitations & restrictions if you are NOT RG146 Accredited?

    You CANNOT do the following things without RG146 training and AFSL authorisation, even if you are a recognised accountant:

    • You cannot give any advice that relates to the particular assets or investment strategy of the SMSF, including whether the trustee should acquire or dispose of certain financial products or classes of financial product.
    • You cannot recommend that the client dispose of interests in another type of superannuation fund (such as an employer fund or public offer fund), or any other type of financial product, even if the recommendation is for the client to dispose of that product in order to establish or join a SMSF (for example, by rolling over funds from the other superannuation fund to the SMSF).
    • You cannot recommend that the client change the investment strategies or contribution levels of another type of superannuation fund. That is, you cannot recommend that the client stop contributing to an existing superannuation fund and instead make contributions into a SMSF. You cannot give advice to switch between investment options.
    • You cannot recommend that your client should not invest in other types of financial product.
    • You cannot recommend that your client join an existing SMSF unless that recommendation is reasonably necessary to, and an integral part of, advice about the establishment, operation, structuring or valuation of the fund.

    Accountants' RG146 Advice Authority - what are your options?

    When the Accountants' Exemption ends on 30th June 2016, those Accountant who provide services (and most likely advice) in relation to the setup, maintenance and pension-phase transition of SMSFs have the following options:

    Option 1. Obtain and maintain a limited Australian Financial Services Licence (AFSL) - (Annual ongoing costs estimate at approx $35k pa.)

    Option 2. Become, or recruit, an Authorised Representative of an Australian Financial Service Licence (AFSL) holder.

    Option 3. Refer clients to Financial Advisers - enter referral relationships and partner with a Financial Adviser.

    Option 4. Do nothing and provide no SMSF services - thereby, losing not only revenue but (potentially) clients to other Accountants who can service the client's full needs.

    The most popular solution is...Option 2 (see article about the challenges faced in getting a Limited AFSL - ASIC & Accountant AFSL Application numbers November 2015)

    It is important for Accountants to research the licensing options as well as the RG146 training to ensure they are in line with the business goals they are trying to achieve. For example, we have created two distinct Accountant RG146 Programs, designed to cater for the two most common outcomes.  

    The first is the Accountants' Essential Advice (AEA) Program; this is ideal for Accountants who simply want to be able to continue to establish or wind up Self-Managed Super Funds for their clients as well as continue to recommend superannuation contributions, pensions etc.  The AEA is not designed for Accountants who want to provide holistic, broad-based financial planning advice about a client's investments or personal insurance needs.

    The second is the Accountants' Strategic Advice (ASA) Program; this is ideal for Accountants wanting to engage on a deeper level with their clients and provide strategic 'class of product' financial advice without recommending a product solution.

    Whichever pathway is most suitable, the time to act is now so you are ready and well-placed for the start of 2016.  Integrity Education can introduce Accountants to AFSL holders who have Accountant-specific licensee offers - we do not receive any financial remuneration and see such a services as part of the overall education process for Accountants seeking to understand the best solution for their specific business needs.

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