The new Financial Services Reform Act (FSRA) came into force on 11 March 2002 and not only means change for financial planners, but also other professions, including accountants.
The new licensing regime sets the financial services industry a higher benchmark by way of tougher licensing rules and increased disclosure requirements.
Of concern to many in financial services are the substantial compliance requirements, and therefore the costs involved in meeting them. However, of even more concern are the unintended consequences for those such as accountants working outside the industry.
Accountants who are not currently licenced by ASIC to provide financial advice will no longer be able to offer incidental advice. There is now a requirement where accountants will need to determine what activities they can continue to provide without the need to be licensed. For those remaining activities, the challenge facing accountants is to make a decision during a two-year transitional period whether to provide financial planning advice personally and therefore, become licensed, or whether to refer clients to someone who is licensed.
CPA Australia worked closely with Treasury and ASIC to ensure the original FSR Bill did not contain unintended consequences and ambiguities for members. Although many of these issues were dealt with, no doubt, there will be some further fine tuning required now that the legislation has been implemented.
