Current as of June 2016
As highlighted in our March Newsletter, from 1 July 2016, accountants will no longer be able to give clients advice on Self Managed Superannuation Funds (SMSFs) unless they are registered as an Australian Financial Securities Licensee (AFS Licensed Accountant).
At Stanley & Williamson we are registered, and will continue to be registered to provide SMSF advice to all our clients, as we have for over 25 years.
Unfortunately, this change in licencing, and the required documentation that is now imposed on us by the Government, will mean that the cost of setting up a new SMSF will increase and the process will become more complex. This is due to the new laws requiring us, as an AFS Licensed Accountant, to review and document your personal financial situation before determining whether an SMSF is suitable for you.
The AFS licensed accountant will also be required by law to issue you with a Statement of Advice (SOA) before an SMSF can be setup. An SOA takes a substantial amount of time to prepare, as there are set procedures that need to be followed, and paperwork supplied to you, in accordance with the ASIC regulations.
Below are some examples of what accountants (licensed and unlicensed) are able to advise their clients on in relation to SMSFs after 1 July 2016.
AFS Licensed Accountants can advise on:
- Setting up an SMSF
- Whether to start or stop an account-based pension account
- Contribution levels and amounts
- SMSF investment strategies
Unlicensed Accountants can only provide you with:
- Tax calculation and tax advice relating to your SMSF
- SMSF year end accounting, compliance and administration
- Information on compliance and regulations relating to SMSFs
According to ASIC, SOAs should cost between $2,000 and $4,000 (for comprehensive advice required to consider whether the set up of an SMSF is relevant to you). This cost is over and above the actual costs of physically setting up the superfund. The extra costs relate only to the giving of the advice to set up the fund. There will also be additional costs for the advice and implementation as well as ongoing administration of an SMSF (e.g. starting a retirement pension account). Accordingly, the cost to advise on and to manage your SMSF will go up significantly from 1 July. Unfortunately this is something that has been imposed on the accounting industry and, with ASIC saying they will be keeping a close eye on all accountants to ensure compliance, it is important for all concerned that the new rules are adhered to.
We will keep you updated on the changes and requirements in the SMSF space, particularly as we get closer to the 1 July changeover. In the meanwhile, if you have any queries in relation to the above, please do not hesitate to contact us to discuss.
This newsletter has been produced by Stanley & Williamson as a service to its clients and associates. The information contained in the newsletter is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this newsletter, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under Professional Standards legislation.