Self-Licensing or Authorised Representative - which is the right option?

    Almost every Accountant now knows about RG146, and the looming 30th June 2016 deadline. Some commentators have given the '30th June 2016' date an almost Armageddon-like status.   

    Having said that, it's not a bad thing to have a deadline (that's what many of us work to), however it is not the be all and end all date.  Accountants can still transition in to the financial planning licensing regime post 30th June 2016, however it just means until they do they cannot provide any personal advice to their retail clients.

    Accountants' RG146 Advice Authority - what are your options?

    As detailed in previous posts, when the Accountants' Exemption ends on 30th June 2016, those Accountants 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 manage a limited or full Australian Financial Services Licence (AFSL).

    Option 2. Become an Authorised Representative (AR) 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.  There are several organisations in the marketplace that can assist Accountants in attaining their AR status.  Integrity Education has contact with most of these providers and I a happy to have a chat with anyone seeking further information or an introduction.

    The 'right' option depends entirely on where an Accountant want to take their business, what they want to achieve in the future, and the opportunities within their existing client base and professional network.

    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.

    Self-Licensing - for many it's about independence

    I wrote in a previous post (Accountants' RG146 Transition Programs - to do or not to do?) there is some confusion about what level of RG146 training is required and the state of play post 30th June 2016.  

    Similarly, there is confusion about what is required for an Accountant to get their own AFSL, whether it 'has' to be a limited AFSL, whether they can apply for a 'full' AFSL, and what the difference is between having one's own AFSL as compared to becoming an Authorised Representative of an AFSL.

    I am not a Lawyer so will not attempt to provide any guidance on whether a limited licence is more appropriate than a full AFSL, or detail the intricacies of each licence.   An interesting article I recently read highlighted some important aspects to think about (read article). 

    Many Accountants see the self-licensing pathway as providing them with the ability to:

    • Grow the future value of their practice.
    • Maintain their independence.
    • Keep the focus on their clients and their practice.
    • Enhance their advice services.
    • Make informed decisions about what’s right for them and their business.

    There are only a handful of organisations offering assistance to Accountants who would like to attain their own AFSL, but feel the process may be too difficult. Integrity Education has contact with most of these providers and I a happy to have a chat with anyone seeking further information or an introduction. 

    What's the rush?

    In a recent article dated 20th November (read here) ASIC highlighted a couple of interesting facts:

    • ASIC had received 204 applications for a Limited AFSL
    • 78 Limited AFSLs had been issued
    • a further 101 applications had been rejected or withdrawn
    • there were 21 applications under assessment

    ASIC went on to state "Accountants who do not lodge applications which meet ASIC’s requirements by 1 March 2016 run a significant risk that their application will not be assessed before 30 June 2016."

    This means that any Accountant thinking about getting their own AFSL will need to complete the relevant RG146 Training and complete all the necessary documentation ready to be lodged by 1st March 2016.  That is just over 3 months away - or, more exactly, 11 weeks including the Christmas and Holiday season.

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