POWERED BY MOMENTUM MEDIA
Limited licensing numbers drop by a third in the past year
The number of accountants providing advice under limited licences has continued to spiral downwards, dropping by a third during 2022.
Based on data from Wealth Data, the number of advisers operating under a limited licence dropped by 35.3% over the 2022 calendar year.
The number of advisers operating under a limited licence as at 22 December, 2022 had fallen to just 630.
In recent years there had been a significant decline in the number of advisers operating in the limited licensing regime with 1,608 advisers previously operating under limited licenses back in July 2021.
The Wealth Data dashboard indicated there has also been a slight drop in the number of accountants who are authorised to provide advice under full AFSLs with this number dropping from 899 down to 843.
The number of advisers across the entire adviser population fell by 7.6% during the 2022 calendar year with the advice industry losing a total of 1,304 advisers.
The rate of decline was less significant compared with 2021 when 2,445 advisers left the advice industry.
In June last year, the SMSF Association said that the limited licensing regime had failed to meet its objectives and had been rendered ineffective due to a multitude of factors.
Since 1 July 2016, SMSF professionals have been required to be licensed or authorised with ASIC either through a full AFSL or limited AFSL to provide SMSF advice services.
The SMSF Association noted accountants who intended to give financial advice spent considerable time and money reshaping their business to meet the new limited licensing regime.
“This has involved the duplication of entity structures as a separate entity is required from which licensed advice services are to be provided. It must be clearly separate and distinct from the main accounting practice entity,” it said in a submission to the Quality of Advice Review (QAR) last year.
This duplication, it explained, had also brought a duplication of costs in addition to the costs of licensing itself.
“It also creates a significant level of complexity when it comes to providing advice services to clients. This structuring is about limiting the exposure of the AFSL to the activities of the broader accountancy practice,” the submission stated.
“Clients do not understand nor care about a firm’s structuring and simply want to obtain the advice they need from their professional adviser.”
The SMSF Association also claimed that the limited licensing regime had prevented SMSF trustees from obtaining basic SMSF advice in a convenient t and affordable manner.
“SMSF trustees who wish to seek basic SMSF advice are either required to spend significant money seeking financial advice from a licensed adviser or must act without advice,” it stated.
This article first appeared on Super Review's sister publication SMSF Adviser.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
