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360 Degrees: Your thoughts on the return of the accountants' exemption

Q. What do you think about putting the accountants’ exemption back on the table? Should accountants be allowed to provide incidental financial advice, particularly in regard to SMSFs?

360 Degrees: Your thoughts on the return of the accountants' exemption
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Mitchell Moroney principal, Moroney & Associates

The recent recommendation submitted to Treasury to reinstate the accountant’s exemption (withdrawn in 2016) will be a positive move in the right direction for not only the industry but also the general public. Clients looking to secure their retirement need one main trusted adviser to be by their side throughout the process. Yes, to have a successful and fruitful retirement there will likely be other parties involved e.g. financial planners etc.

However, the accountant being the main trusted adviser should be by their side the whole time. With the withdrawal of the accountant’s exemption, this fostered an environment where the general public were forced to engage multiple advisers to ensure that they abide by all the red tape put in place by the government.

This made for a costly and disjointed system where the client had multiple people pulling them in each direction without one person steering the ship. The reinstatement of the accountant’s exemption would mean although the accountant cannot give financial advice, they will be able to advise the client to establish and wind up SMSFs. This will allow the trusted adviser to be by the client’s side from the start until the end.

If the government truly has the best interest of the public at heart, they will re-establish the accountant’s exemption and allow the public access to the support and advisers they need.

Kaleem Ulah director and senior consultant, The Kalculators 

I think it’s a really good move by the government, especially by the Treasurer, to put this back on the table. There are a lot of clients who can not afford a financial adviser. And there is a relationship between an accountant and the client, I believe, that they meet really often and there is a trust there.

Clients believe that their accountant can help them with these sorts of things, but then when they ask us for advice, we are really limited on that and we can’t say anything at all on some things. So, we know these things, but we can’t disclose them due to these restrictions. I think if accountants were enabled to provide incidental financial advice, their clients would gain in confidence, besides also saving money.

There is a moment there when your clients have small SMSFs and they don’t want to pay all these fees to financial advisers to get that advice written up for them. But I do think there should be a certain line that accountants aren’t able to cross. After that, if its complicated advice, clients should be referred to a financial adviser. This level should be regulated by the bodies, they need to impose the limitations.

Well trained people need to move in and help them with these things. 

Carolyn Geyer principal, Geyer Accountants

Definitely a yes from me. An SMSF is a structure like any other that we should be able to recommend to our clients in structuring their affairs. Accountants are considered trusted advisers and many clients rely on their accountant for basic investment advice on SMSF and super contributions but we are unable to answer their questions.

Not having the accountant’s exemption has made it difficult to simply point the client in the right direction with some basic incidental financial advice. As a result, many people have opted out of getting advice due to the cost and not knowing the adviser. This has led to people, who don’t have a lot money, not getting some basic financial advice.

It is the lower income earners who need to be pointed in the right direction or some good incidental advice. A good financial plan is very important; however, it is expensive and out of the reach of many people whether they have an SMSF or not. It seems crazy but we can’t advise a client to close their SMSF and transfer their superannuation elsewhere, when their SMSF is losing money and they are going backward financially.

We recommended that they seek advice from a financial planner but the client struggled to afford the service. Accountants should be able to provide clients with basic comparisons between an SMSF and an industry fund and a retail fund.

Dr Frank Maisano academic, RMIT University

An exemption for professional accountants in advising clients on basic and/or incidental financial matters is a strategy which should be investigated thoroughly. The nature and scope of the professional accountant leads to an inherent, high level of acquired financial knowledge, with accounting and finance going hand in hand when delivering high quality service to clientele.

Particularly accountants in small practice, their clientele have a level of trust in them, and being able to deliver an end-to-end solution for clients in this situation can only enhance clientele experience, especially with regard to the popularity of SMSFs.

In accounting and financial matters, if clientele are forced into a fractured system, having to contract the services of multiple firms and/or professionals, to deliver these services, it will lower the client experience, increase the use of resources, and undermine the current trend of streamlining processes and increasing efficiencies in all aspects of business.

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