Our latest adviser poll considers the recent announcement by the Government of the implementation of a new type of Australian Financial Services Licence (AFSL) intended to increase the availability of financial advice for consumers.
With the Government expecting up to 10,000 accountants to provide ‘class of product’ advice under this new licence, we are asking:
Do you support the new limited AFSL that will allow accountants and other advisers to deliver a broader range of financial advice to consumers?
Industry reaction to this new form of AFSL has been largely positive to date, but feedback from individual advisers has been mixed.
Financial Services Minister, Bill Shorten, said the new AFSL is a major step forward and will help to facilitate a significant expansion in the provision of financial advice to Australians: “As accountants begin operating within the AFSL regime, there will be more options for consumers to access low-cost financial advice on important issues including insurance and superannuation needs,” he said.
A number of institutions and representative bodies have given their support to the new AFSL, but some comments we have received from advisers question whether the quality of advice that may be provided under this arrangement will be appropriate. Advisers have questioned whether accountants will have a sufficiently thorough knowledge of their clients’ personal and financial circumstances to be able to deliver the best advice in areas such as insurance, superannuation and simple managed investments.
The Coalition’s response to date has been cautious, with Shadow Financial Services Minister, Senator Mathias Cormann, making the point that the devil will be in the detail of the regulations that will give effect to the new licence.
Without yet knowing these details, do you believe this initiative from the Government will open the door for many more Australians to receive appropriate financial advice? Is this a great opportunity for financial advisers and accountants to work more closely with each other, for the long-term benefit of consumers? Or do you see more hurdles, sub-standard advice and increased professional indemnity cover fees resulting from this initiative?
Tell us what you think…
Accountants don’t work for zilch. If we believe they wont be receiving commission on risk because of the ethics policies of their professional bodies, how do they make a quid on advising on,say, income protection.
Will they gross up the tax return work by a component for advice on everything else they do at the annual meeting ? Clients are not dumb-if the accountants recommends the replacement of an income protection policy and says I will charge you a ( non-deductible )adviser fee for your insurance advice ( in return for not taking commission ) that client might just remember that his previous insurance adviser took commission and never charged a fee
The majority of accountants business clients will not have large investment portfolios to generate fees, which may or may not be tax deductible, so the insurance fee can’t be hidden there
I predict the accountants will be adding the insurance advise fee into the ( deductable ) expense of preparing the tax return.
Silly Billy has just generated a revenue problem for his government if the size of the deductible fees being claimed at the ATO for income tax advice treble
Shorten has just created more audit work for the ATO
” Oh what a tangled web we weave when first we set out to deceive …….”
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