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Tuesday 25 August 2015

15-227MR Applying for a limited AFS licence – the time to act is now

Currently accountants are allowed to provide limited advice on self-managed superannuation funds (SMSFs) without the need for an Australian financial services (AFS) licence.

ASIC is reminding those accountants without an AFS licence or who do not intend to become an authorised representative of an AFS licensee, to start applying for a limited AFS licence now, if they want to keep giving SMSF advice after 30 June 2016. To date, ASIC has received only 160 applications for the limited AFS licence and granted only 70 licences - despite the application process being open for the past 2 years.

ASIC strongly encourages accountants to start preparing their applications and start any required training now should they wish to continue to provide such services after 30 June 2016.

Accountants should also contact their professional membership Associations (e.g. Chartered Accountants Australia+New Zealand, CPA Australia, Institute of Public Accountants)

After 30 June 2016, accountants must obtain a licence or become an authorised representative of a licensed firm or risk ASIC regulatory action.

ASIC Deputy Chairman Peter Kell said, ‘Accountants should ensure they’ve allowed enough time to properly prepare an application and to undertake any relevant training. Where an application is in good order ASIC can assess the application within four weeks, but if further details are required because the information provided is insufficient this will take longer.’

Accountants who do not lodge applications which meet ASIC’s requirements by 1 March 2016 run a significant risk their application will not be assessed before 30 June 2016.

There are no proposals to extend the 30 June 2016 cut-off date. Accountants have been able to apply for this type of licence since 1 July 2013.

Mr Kell added, ‘There has been adequate time to apply for these licences. After 30 June 2016 any accountant found to be providing unlicensed advice risks regulatory action. Providing unlicensed financial services is a criminal offence.

‘Our message to accountants is clear: don’t be complacent, you need to act now’.

Fact sheet - limited AFS licence

  • The licence application process is not complicated. ASIC has prepared INFO Sheet 179 Applying for a limited AFS licence (INFO 179) to assist applicants.
  • Applicants do not need to engage a professional firm to assist them get a licence. Of the licences granted to date, less than 10% have involved a professional firm.  ASIC has reduced the number of questions in the Application Form for the Limited AFS licence and similarly reduced the number of supporting proof documents required to be lodged with the Application. Also ASIC will assist applicants if they need guidance with the process.
  • Completing accountancy based continuing education will not be sufficient to be entitled to provide financial advice in relation to SMSFs. Satisfactory completion of relevant training courses to provide advice on the relevant classes of financial products will be necessary.
  • The organisational competence requirements for recognised accountants will be more onerous after 30 June 2016. Recognised accountants applying after 30 June 2016 will need to demonstrate at least 3 years of relevant past experience.
  • An accountant’s standard professional indemnity insurance will generally not cover the provision of financial services by the accountant.
  • If ASIC receives an application but has not granted a licence by 30 June 2016, the applicant cannot give SMSF related financial advice and dealing services after 30 June 2016 until such time as they are granted a licence or they become an authorised representative of a licensee.
  • Accountants may wish to contact their industry associations (Joint Accounting Bodies) for additional guidance on applying for a limited AFS licence and the training that is needed to meet ASIC’s requirements.


The current ‘accountants’ exemption’ under regulation 7.1.29A of the Corporations Regulations 2001 permits ‘recognised accountants’ to provide a recommendation in relation to a SMSF, without the need for an AFS licence.

As part of the Future of Financial Advice (FOFA) reforms, this exemption will cease to apply on 1 July 2016. Since 1 July 2013, accountants have been able to apply for the new limited AFS licence or become an authorised representative.

Click here for more information limited AFS licence - accountants and advice

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Last updated: 20/07/2016 01:03