Licensing requirements for accountants who provide SMSF services updated by ASIC After almost two years of accountants exemptions were repealed, there is still confusion among accountants folk regarding requirement of an AFS licence and it is still not clear to many accountants on what activities they can and cannot do with or without a licence.
ASIC recently amended their information sheet 216 to help accountants understand their activities and perhaps help them to draw a line - on when an accountant will require an AFSL and give a clear understanding of exempt activities. Exemption which allowed accountants to give financial product advice about acquiring (set up) or disposing (close down) of an interest in an SMSF was repealed on 1st July 2016, this exemption was in regulation 7.1.29A of the Corporations Regulations 2001 (Corporations Regulations). A range of other exemptions still continue after 1st July 2016. Under these exemptions, you can provide some types of financial services without being covered by an AFS licence. From 1 July 2016 all accountants must be covered by an AFS licence to give advice about acquiring or disposing of an interest in an SMSF to their clients. A person who provides financial services must be covered by an AFS licence, either by:
Accountants can apply for an AFS licence to provide a limited range of financial services relevant to SMSFs. ASIC refers to this form of licence as a ‘limited’ AFS licence: see ASIC regulations 7.8.12A and 7.8.14B.
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What is a Financial Product Financial products include an interest in an SMSF and many of the investments that are typically held by an SMSF, such as securities and interests in managed investment schemes. While real property is not itself a financial product, an interest in an SMSF is a financial product. Providing a recommendation or a statement of opinion on using an SMSF as a vehicle to invest in real property is financial product advice, and requires an AFS licence with an appropriate authorisation. If you are discussing options for borrowing for investment in residential property through an SMSF with your clients, you might need to be covered by an Australian credit licence. A limited AFS licence only authorises the licensee to provide a limited range of financial services relevant to SMSFs – for example, advice about SMSFs, advice about a client’s existing superannuation holdings (in certain circumstances) and ‘class of product advice’ – depending on the authorisations that are selected in the application and granted by ASIC. ‘Class of product advice’ means financial product advice about a class of products that does not include a recommendation about a specific product. For example, an accountant covered by a limited AFS licence could provide class of product advice about mining shares or shares in the ASX 100, as long as that advice did not include a recommendation about a particular mining share or a particular share in the ASX 100.
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CPD Requirement for SMSF Auditors
SMSF Auditors: SIS Regulations 9A.04 (1) For paragraph 128F(a) of the Act, the requirements in this regulation form the continuing professional development requirement. (2) The approved SMSF auditor must undertake at least 120 hours of continuing professional development every 3 years. (3) The development must: (a) include 30 hours of development about superannuation at least 8 hours of which is development about auditing of self managed superannuation funds; and (b) : be development that could reasonably be expected to enhance an approved SMSF auditor's technical skills or professional service delivery.
This is what one of the attendees had to say about our seminar : Thank you Manoj for inviting me to your seminar. I really learnt a lot of practical SMSF audit issues from the seminar . I liked your presentation style and the way you conducted the technical content explaining the new law on how it will work on the white board. I been to many seminars including SMSF School and SMSF workshops run by professional bodies but your presentation was quite unique and much much better - it was targeted at my level and I could understand how simple strategies can help my clients - we need simplified versions of complexities of the new SMSF law including CGT relief, effect of balance transfer account on death benefits, ECPI etc . You’re one of the best! Please include me in your mail out for your technical sessions. Ash Alam CPA Registered Tax & ASIC Agent Justice of the Peace & SMSF Auditor
Current Exemptions to Accountants There are a number of exemptions from the requirement to be covered by an AFS licence, including for accountants providing services relating to SMSFs. These exemptions apply to a variety of different activities SMSF services provided by accountants usually fall into one of three categories:
Exemptions will apply if the financial service happens to be an integral part of or incidental to another type of service typically provided by an accountant – that is, you would reasonably need to provide the exempt SMSF financial service in order to carry out your normal accounting practice. There are other types of advice and services you may provide without an AFS licence, such as
Establishing, operating, structuring or valuing an SMSF - without AFS Licence You may provide advice on establishing, operating, structuring or valuing an SMSF without an AFS licence: regulation 7.1.29(5). This means that without being covered by a licence, you can:
You may also provide other relevant factual information that your client should know about establishing an SMSF (e.g. that they must have the financial accounts and statements for the SMSF audited each year by an approved SMSF auditor). You can only rely on this exemption if the advice is provided to a trustee, a director of a trustee, an employer sponsor or a person who controls the management of the SMSF. The advice must be given to the person in their capacity as a person who controls the assets owned by the trustee of the SMSF, and not in their capacity as a beneficiary (member) of the SMSF. Where you are relying on this exemption, if your client is a ‘retail’ client (as opposed to a ‘wholesale’ client – see section 761G and related regulations for the definition of this term), under regulation 7.1.29(5)(d) you must provide a written statement to your client that:
The advice you give about establishing, operating, structuring or valuing an SMSF must not amount to an explicit or implied recommendation to establish an SMSF, or to acquire or dispose of an interest in an SMSF (or another superannuation product). However, ASIC recognises that advice given to a person about the establishment of an SMSF may also carry an implicit recommendation that the person acquire an interest in the SMSF. Therefore, you are more likely to be able to rely on the exemption when your client has already made a decision to establish the SMSF before seeking your assistance to take the next steps. For example, you may recommend the best structure for an SMSF to suit your client’s situation, after they have made the decision to establish an SMSF.
Establishing, operating, structuring or valuing an SMSF - with AFS Licence If you are covered by an AFS licence, including a limited AFS licence, you cannot rely on the exemption for the provision of advice on the establishment, operation, structure or valuation of a superannuation fund (regulation 7.1.29(5)) to a retail client. This is because an AFS licensee, or its representatives, cannot comply with the requirement in regulation 7.1.29(5) (d)(i) to provide a written statement that the person providing the advice is not licensed to provide financial product advice under the Corporations Act. Therefore, any financial product advice that you provide to a trustee of a superannuation fund about the establishment, operation, structure or valuation of the fund is not an exempt service and will generally be covered by your licence. This includes advice given for the sole purpose of complying with superannuation legislation.
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Learn how to Audit in less than half time CPD Hours : 6 Hrs in SMSF & Audit - 2 Hrs in Superannuation & 4 Hours in Auditing SMSF's Topics
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Proposed Agenda 09.00 AM Registration - Arrival Tea and Coffee 09.30 AM Introduction to Audit Online on SMSF Audit Software and Website integration 11.00 AM Tea/Coffee Break 11:30 AM Audit of SMSF under the new regine of Transfer Balance Cap | Contributions & Total Superannuation Balance | CGT Relief 01:00 PM Lunch and Group Discussion on Audit of funds with LRBA - Loan from related party - how repayment of Loan will be considered 02.00 PM How to complete an audit in half the time 4.00 PM Workshop Closed
Introduction/Overview SMSF Auditors spend too much time in financial audit and completing manual audit working papers, our online software does most of this work automatically & saves half your time as compared to traditional auditing methods. It checks closing share prices, dividends received from ASX and all mundane tasks of signing, scanning & mailing of audit report, Mgt. letter, engagement letter, Invoice & contravention reports etc. are automated with one click of a mouse. Embrace an efficient framework for high quality audits and conduct audits on a flawless workflow Management system. Achieve peace of mind & confidence of knowing that you are using a completely up-to-date online checklist and cloud process to deliver a robust, hassle free top quality SMSF audit. Improve communication with accountants & trustees. Manage 20 or 2000 audits by streamlining workflow from our smart Audit Manager & establish seamless communication between all parties. Our online SMSF audit system is the only tool which can deliver reliability, speed and volume and ultimately profits for your business at a fraction of the cost.
Benefits/learning outcomes Audit from anywhere, anytime from any device on your own website or by integrating with ours. Increase audit effectiveness, add value, reduce audit risk, drive SMSF compliance, revolutionise your business. Included in the fee is an account to audit 10 SMSF on the online platform worth $187 and Lunch. Those auditors who are already using the online software will benefit by learning new shortcuts and other advanced features of the online software.
Recommended For All SMSF ASIC approved auditors. Session Notes CPD Hours 2 Hours CPD in Superannuaiton and 4 Hours CPD on auditing SMSF's Total 6 CPD hours under self assessment method under RG 243.88 - 90 and SISA 128Q and SISR 9.04 RG 243.89 You will need to complete 120 hours of CPD over each three-year period, which must include 30 hours of development on superannuation and at least 8 hours of development on auditing SMSFs. SISR 9A.04 (3) (b) be development that could reasonably be expected to enhance an approved SMSF auditor's technical skills or professional service delivery.
Attendee Requirements Attendees may bring their own Laptops / Ipads for a better understanding - although some attendees may get more from the workshop by looking at the facilitators screen Speaker Manoj Abichandani Manoj has worked in SMSF since 1988 and is SMSF Specialist (UNSW). He was providing high level advisory services to over 600 funds in his own 3 partner CPA tax practice for 19 years and has written this online software. He currently works as SMSF Technical Support Team Leader at www.trustdeed.com.au He has hands on knowledge on what happens in a tax practice on high level of SMSF practical issues. |
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