Advisers and accountants have been warned at the 2018 SMSF Association Conference that they need to clearly differentiate between financial advice and accounting services.
Increased amounts of accountants are now giving financial advice to clients in addition to their accounting offerings, and they need to be more aware as to what they are providing, what their obligations are, and whether they are charging appropriately for that service.
Investment Trends’ 2017 Accountant Study found that four per cent of revenue from self-managed superannuation fund (SMSF) clients came from the provision of financial advice services in 2017. They expected this to almost double to seven per cent by 2020.
Chief executive of Licensing for Accountants, Kath Bowler, told Conference delegates that accountants advising SMSF clients needed to clarify whether they were offering advice or merely facts.
“Don’t sit on the fence with advice and facts,” she said. “As soon as clients want advice, charge for that and ensure you do it properly.”
She said that the hardest thing for accountants moving into the advice space is not letting advice occur without clarifying that was what it was and charging as such. She warned that accountants and advisers needed to be sure they were having a conversation in that regard with clients rather than letting it slide.
Paul Derham, a partner at financial services law firm Holley Nethercote, said that professionals giving advice would need to ensure that they met the legal standards required of advice as opposed to the provision of facts. He said particular attention needed to be paid to meeting best interest obligations.