Small businesses will benefit from a new association designed to educate accountants on how to provide financial planning advice, a spokesman for the new organisation argues, in a move designed to pre-empt the introduction of new financial reform laws.
The proposed laws will eradicate a current exemption for accountants in giving advice on self-managed superannuation funds. The National Tax and Accountants’ Association is creating a Financial Planner’s Association for its members, designed to provide qualifications for giving advice on SMSF and other financial matters.
But National Tax and Accountants’ Association spokesman Roger Cotton says the new Financial Planners’ Association is also part of an attempt to take back “lost ground” stolen by the financial planning industry.
He argues that many financial planners are biased in their attachment to large institutions, and says receiving advice from independent accountants will provide businesses with more specifically tailored and relevant recommendations. He argues this will save them time and money.
“Businesses go see their accountants, and under the new laws those accountants won’t be able to give any advice whatsoever. What we’re doing simplifies things and from a customer base, businesses and individual customers will be much happier just receiving the advice from the same person.”
Under the current legislation, providers of financial advice require a license to practice. However, the accountants’ exemption allows accountants to provide advice on self-managed superannuation funds – the super of choice for many entrepreneurs. The new laws will eradicate that exemption.
While the proposed laws won’t come into effect from July 1, 2012, Cotton says the current members of the NTAA will be provided training and membership into the new association, allowing them to continue providing advice on self-managed super and they will be ready if the reforms go ahead.
He says the move is as much a practical one as it is a message that accountants should be able to practice giving out self-managed super advice to their current clients.
“Our view is that people already have relationships, they have the trust and respect of their client base, and this will take away the opportunity for people to go to the one provider for all of their advice.”
“I think there is a lot of confusion now, and there are a whole bunch of people who are not aware of what’s going on. We think this is a good opportunity for accountants to not only grow their business, but get on track with some business they may have launched.”
The association will partner with three training firms and hold briefings for over 7,500 NTAA members on how to become members of the FPA. Cotton says the industry will benefit from the further education.
“We think this simplifies matters, and from a customer standpoint, people will be much happier. Who wants to go to two separate providers for matters over super when your accountant, who knows your history and so on, can give that same advice?
Liz Westover, super spokesperson for the Institute of Chartered Accountants, says the organisation largely backs the reform but there is a place for accountants to provide non-product advice. She says the organisation applauds any effort to further educate members on financial matters.
“For product advice, absolutely you should need a license. But we think there’s a position for accountants in the provision of non-product advice and we think that’s going to be one of the significant measures that will help Australians increase their financial literacy.”
“I haven’t seen anything other than what’s been announced, but it looks as though the NTAA is simply trying to pre-empt what’s going to happen. But education is important, and that’s going to be a significant part of whatever comes out of the FOFA reforms. We support further education.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
