The government has finally announced that it is altering exemptions on accountants providing a broader range of financial advice.
The minister for financial services and superannuation Bill Shorten announced on the weekend that a new limited Australian Financial Services Licence (AFSL) is expected to see up to 10,000 accountants become licensed and able to increase the range of financial advice they offer.
Labelling the move as creating “a new form of financial advice licence that will significantly increase the availability of financial advice for all Australians”, Shorten announced that – in addition to being able to advise on self-managed superannuation funds (SMSFs) and superannuation generally – licence holders will also be able to give "class of product advice" on basic deposit products, general and life insurance, securities, and simple managed investment schemes.
"This new licence will extend the consumer protection provisions of the Corporations Act, such as the best interests duty in the recently passed Future of Financial Advice reforms, to financial advice provided by accountants," said Shorten.
The new license won’t allow accountants to recommend specific products, but a statement from Shorten has claimed that it will allow accountants – and any financial advisers who may hold this licence – to provide more strategic and low-cost forms of financial advice “which will greatly assist Australians to manage their finances effectively”.
Shorten has also claimed that the reform will create a significant opportunity for accountants and financial advisers who wish to grow and diversify their business by tapping into the small business market.
"This replacement to the current accountants' licensing exemption is a major step forward and will help to facilitate a significant expansion in the provision of financial advice to Australians,” he said.
"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."
The draft regulations will go through a public consultation period before coming into effect during the second half of the year.