Accountants seeking to be licensed to continue providing advice around self-managed superannuation are failing their applications in high numbers despite being given a generous run by the government according to a former ASIC licensing specialist.
Know Compliance licensing specialist Frank Varga, who worked in ASIC's licensing unit, said the failure of accountants to secure licences during the transition away from the limited licensing regime was usually the result of not providing fundamental information despite the sector receiving beneficial conditions during transition.
"It is a good deal they have received, but when they look at it they will see it still has fair bit of compliance they need to deal with. However the government has been generous in the streamlined approach and the assessment of their experience and the addition of them not having to be audited," Vargas said.
"There is a different licensing regime in place but the government has been generous in putting them into the tent."
Vargas said only 50 licences have been granted so far by ASIC with around half of all accountants seeking to obtain a licence failing due to inadequate information or the failure of responsible managers to be appropriately qualified to hold a licence.
He said that common failures he had witnessed so far include accountants being unsure under which business structure they should apply and then submit cash flow projections and financial position statements of that vehicle to support the application.
Vargas also said nominated responsible managers are either not meeting the minimum educational requirements detailed by ASIC or if they have completed short courses they did not cover the broad authorisations being applied for under the licence.
Despite this he believes that there will be rush for applications as the transition period comes to a close in 2016 similar to those seen under the licensing arrangement of the Financial Services Reform Act and Credit Act.
"It is still a total unknown as to how many will apply with the accounting bodies stating it may be in the thousands. I worked with ASIC during those other periods and we saw a mass of applications but at present it is still hard even for ASIC to ascertain how many will apply."
