New regulations for accountants could deal a major blow to the SMSF
market, an accounting firm has claimed.
New regulations set to be introduced by 1 July 2016 will require accountants to hold an AFSL to give advice on SMSFs
. But chartered accounting and advisory firm William Buck's chairman, Nick Hatzistergos, has said this change could spell the end for mass uptake of self-managed super. Hatzistergos said the regulations could make running an SMSF cost prohibitive.
“Our ability to assist clients with their SMSFs is critical to providing them with the most comprehensive advice possible. For multi-disciplinary firms, like William Buck, the change is minor as we already hold an AFSL and have the necessary skills to offer this advice. However, for a number of accounting firms it’s going to add a huge amount of time and complexity to the process," Hatzistergos said.
Hatzistergos said the move was "counterintuitive", and said the growing cost and complexity of SMSFs risked making them unviable.
“The most likely outcome is it will become cost prohibitive for people to run their own SMSFs so they will move it to the larger industry funds or big banks,” he said.
“With this comes other risks, such as that of conflicted advice where advisors receive commissions for selling specific products. This would go against everything the change has been designed to achieve, and contradict the very reason more Australians are adopting SMSFs."
Hatzistergos said there was no evidence to suggest that accountants had failed in their advice to clients prior to the new regulations.