The incoming $1.6 million transfer balance cap is expected to catch unlicensed accountants offering financial advice as well as accountants neglecting to help clients in order not to breach the licensing regime, an SMSF expert has said.
“Something that needs to be looked at is if an accountant is aware [of their clients being over the $1.6 million], so they must either take it out as a lump sum or put the excess amount back into the accumulation phase, so that’s actually a change in financial product,” @GrantSMSF founder Grant Abbott told selfmanagedsuper. “For example, a financial planner may identify that an amount of money needs to be moved from pension into accumulation. Here, an accountant would need to be licensed. “This worries me also because while it might mean that there’s an opportunity for planners, there are a lot more accountants out there that won’t be talking about this to their clients because they are not licensed. “So there’s going to be a whole subset of people who effectively are not going to know anything until the commissioner informs them that they need to commute and then these clients are going to be [dumbfounded].” Abbott said the decision on whether to put the amount over the $1.6 million cap back into the accumulation side or take it out and potentially put it in a family trust was an area where potentially advisers and accountants could work together. “But it’s January now, so before you know it, all of this will be hitting people on the head,” he warned. In December last year, the Australian Securities and Investments Commission released Information Sheet 216 “AFS licensing requirements for accountants who provide SMSF services” (INFO 216), covering how the Australian financial services licence (AFSL) regime applies to SMSF services provided by accountants. INFO 216 sets out the various SMSF services an accountant might provide and whether a licensing exemption applies to them, or whether an accountant must be covered by an AFSL for those services.