Since 1 July 2016, as a result of the Future of Financial Advice (FoFA) reforms, accountants are unable to provide advice to clients about their Self Managed Super Fund (SMSF) or any other financial product without holding a Limited Australian Financial Services Licence (AFSL) or being an authorised representative of another Limited AFSL holder. This follows a three-year transitional period that commenced on 1 July 2013 and ended on 30 June 2016.
In June 2016, the Australian Securities and Investments Commission (ASIC) warned that accountants who provide advice or dealing services in relation to an SMSF without being licensed from 1 July 2016 risk ASIC taking regulatory action against them. Providing unlicensed financial services is a criminal offence.
ASIC is currently assessing over 3000 applications for Limited AFSLs and has begun contacting applicants who have applied since 1 March 2016, advising them to have contingency measures in place whilst their applications are being assessed by ASIC. Due to an increase in the number of applications for a Limited AFSL in the last six months, ASIC is prioritising applications that were lodged before 1 March 2016.
Applicants seeking their own Limited AFSL should note that simply lodging the application is not sufficient to continue providing advice in relation to SMSFs – ASIC must grant the Limited AFSL before any SMSF-related advice or dealing services can be provided. Applicants may only provide advice in the interim period if they have been appointed as an authorised representative of an appropriately licensed Limited AFSL holder.
In light of the recent warnings given by ASIC, we suggest all accountants consider their position and commence their application for a Limited AFSL immediately if they haven’t already and arrange contingency measures to cover the period while their application is assessed by ASIC.
For more information on Limited AFSL applications or assistance in applying for a Limited AFSL, please contact us.