Make sure your accounting practices are above board and in line with new licensing regulations as of July 2016.
The Part 1 blog-post covered what accountants need an Australian Financial Services License (AFSL) for and drew attention to the items which are not considered ‘Financial Products’ and are exempt from licensing obligations. This next post covers your licensing options and under what circumstances an AFSL isn’t necessary.
Activities that are not classified as ‘Financial Service’, or ‘Financial Product Advice’:
1. Taxation advice Section.766B(5)(c) & Reg.7.1.29(4)
2. Traditional accounting activities Reg.7.1.29 & Reg.7.1.29A (up to 1 July 2016)
3. Broad asset allocation advice Reg.7.1.33A
4. Referrals Reg.7.6.01(1)(e)
1. You can refer all self-managed, super-fund, other superannuation & financial planning inquiries to a licensed financial planner & inform the client what you stand to gain from this referral arrangement.
2. You can become an authorised representative of another organisation’s licence which means you can then give financial product advice, while the licensee is accountable for ensuring compliance with the AFSL obligations.
3. You can get your own limited licence so you can give self-managed, super-fund advice and ‘Class of Product’ guidance. Under this arrangement you are responsible for complying with the license obligations yourself, but on the flip-side you get to enjoy professional independence.
4. Arm yourself with a full AFSL so you can provide a wide range of financial product advice & recommendations not limited to just self-managed, super-funds. If you’ve never given financial product guidance before you’ll need to get the help of a qualified manager to obtain the license for yourself.
5. Think outside the box with recruiting and joint ventures. Going with this last option means you can give all-encompassing ‘Financial Planning Advice’ to your clientele without having to personally give ‘Financial Product Advice’. Investing in resources and integrating financial planning into the core of the business is the key to making this option work well and work fluidly.
It is strongly recommended accountants study the new licensing changes and ensure they understand exactly what is entailed so as to ensure full-compliance and avoid any unnecessary pit-falls.