Is your accountant helping with your super? Here’s something you should check first
New licensing rules are kicking in for the next financial year.
Superannuation is a complex topic, and the rules change all the time. So it's not surprising that many people rely on their accountant to help out, especially if they've chosen to set up a self-managed super fund (SMSF) in a bid to increase their returns.
The superannuation industry is, sensibly, tightly regulated. One key regulation requires that any accountant who is offering advice on how to run an SMSF must either hold a limited Australian financial services (AFS) licence or be an authorised representative of such a licence holder.
That rule has been introduced gradually. Since 1 July 2013, there has been a transition period in operation where accountants could apply for an AFS licence while still offering advice, an approach designed in part to ensure that the Australian Securities and Investments Commission (ASIC) wasn't swamped with applications.
However, from 1 July 2016, when the 2016/2017 financial year begins, those transitional arrangements end. No accountant will be allowed to offer SMSF advice without a licence. As of yesterday, ASIC said it had 300 applications for such licences still to be processed. The chances are high they won't all be sorted before July begins; ASIC had already warned that any applications received after 1 March this year ran a "significant risk" of not being processed.
ASIC is sending letters to accountants who applied after that date to warn them that, in effect, they should be prepared to stop giving advice after 1 July until such time as their licence is approved. Any who do offer advice, even informally, risk being fined.
So what should you do if you're planning to set up an SMSF and need advice? Use ASIC's Registry Search and search the register of Australian Financial Service Licensees. If your accountant doesn't have one, they can't give you advice after 1 July.
ASIC was promised extra funding this year to help it regulate big business, but much of its activity does relate to protecting shareholders and investors. The licensing regime is a key part of that process, so take advantage of it and always check first.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.