According to The Fold, by an accountant becoming an authorised representative (AR) – rather than getting their own limited AFSL – they will not make the associated “compliance hassles” go away.
In fact, while the compliance of an authorised representative largely becomes a licensee’s “problem”, the dealer group will enforce several measures so as the representative meets their compliance standards, the law firm said.
“The licensee will expect you to use their template documents, which means you could be faced with over-engineered and excessively long FSGs, [and] SOAs, particularly if your licensee doesn’t understand the low-risk and limited nature of the strategic advice you provide,” The Fold said.
“You’ll need to abide by the licensee’s compliance policies and procedures – if they’re a ‘one size fits all’ solution that applies to a wide range of ARs, they may not be suitable for an accounting practice. So beware of burdensome and unnecessary red tape.
“The licensee may expect, or even explicitly require, you to refer clients for certain kinds of work,” the firm added.
However, while joining an AFSL will entail an accountant having to meet a significant number of requirements, according to The Fold Legal there are still many “benefits” to joining a dealer group.
“[This is especially the case where a] licensee has creatively thought about the needs of accountants under the limited licensing regime and has developed a special purpose tailored regime – rather than bundling you into their existing financial planning compliance arrangements,” The Fold said.
I am sure accountants who are entering the financial planning industry are presently coming up with unified solutions to the licensing compliance issues they face as they reinvent their business models. One would expect the accounting profession knows there is going to be teething problems as they face the compliance issues, the changes that comes with these issues in the knowledge that financial planning provides them with great new opportunities to add value to their clients wealth and financial goals. Besides accountants are experts in tax compliance, give them time to become experts in financial planning and licensing compliance. Australians will benefit from this.
Snappa, your comments sound as if you’re either a disgruntled adviser, or an even more disgruntled client of one. A lot of emotion, but little fact to what you say, e.g. define what you mean by cost-effective advice?
As an adviser, I’m actually pleased to see that accountants are going to get a taste of what compliance is all about, because in the 25+ years I’ve been in this industry it’s rare to see an accountant being held responsible and end up in court for the advice they’ve provided. You never know, we may be able to have IFA report on banned accountants!
No dealer group or fund manager is stupid enough to NOT see the way the industry is heading. And if they continue to set up “inefficient, expensive systems” and do “back door deals” they’re not going to be around for much longer.
We’ve one of the most highly regulated financial services industries in the world and one we should be proud of. Enough of the adviser/dealer group/fund manager bashing and let’s concentrate on what is RIGHT about our industry and profession.
And dealers setup inefficient expensive systems that render the work unprofitable but they don’t care because they get their money from the rep regardless and then do back door deals with the fund managers to cheat the rep the whole system is a joke stay away from it all. Australians will just have to get used to not be able to get cost effective advice about their affairs anymore.