The conditional Australian Financial Services License (AFS) runs out mid-2016, so it’s time accountants began preparing themselves for what’s next.
In the Corporations Act, under Chapter 7, when these compulsory licensing changes come into effect from June 30th 2016, an AFS license, or alternatively appointment as an authorised representative must be secured by all persons who run financial services businesses.
After this 2016 deadline, all Australian accountants must hold the AFS license or become an authorised representative, or else they will not be permitted under law to provide financial advice to retail clients. There are however, exemptions (see Regulation 7.1.29 in the Act).
One thing accountants should be aware of is that one of these exceptions to the new rules regards superannuation advice. Existing accountants won’t be required to obtain an AFS license to provide guidance and advice on setting-up self-managed superannuation funds (SMFSs).
There are numerous licensing arrangements available which all differ from one another in terms of what you can give advice on and also how much support you’ll receive with each. You are not alone if you feel overwhelmed and confused by what your obligations actually are when faced with so many options and a wealth of information.
One of these options is covered below.
What Exactly Does the Conditional Authorisation Cover?
As an accountant, or financial advisor, you can obtain conditional, authorisation to offer class of product advice, or financial SMSFs guidance on:
2. Superannuation products
3. General life insurance
4. Simple, managed investment arrangements (as outlined in Corporations Regulations 2001)
5 .Basic deposit products
Help for Recognised Accountants
Luckily the transition will be smoother for existing, recognised accountants as streamlining arrangements will simplify the process. In order to be recognised an accountant must hold a practising certificate from CPA Australia, The Institute of Chartered Accountants in Australia, or the Institute of Public Accountants.
One of these streamlining measures is that existing accountants will be able to bypass Australian Securities & Investments Commission (ASIC) scrutiny of their credentials and work history to make licensing easier.
How Long Have Accountants Got?
This conditional AFS license was introduced on July 1st, 2013 and given a 3 year transitioning period for accountants to become familiar with and prepare themselves for the June 30th 2016 deadline AFS license change-over.
For more information about the accountant licensing changes which will come into effect on June 30th 2016, check out our blog post Slicing, Dicing Accountant Licensing, What You Need to Know Part 1 and Part 2.
You can apply for an AFS license through the ASIC website.