Is Now the Time to Bail Out of Your Accounting Practice

Is Now the Time to Bail Out of Your Accounting Practice
How is your firm proposing to address the removal of the accountants’ exemption and SMSF licensing requirements as from 1 July this year?

Presently, there seems to be five schools of thought.

1. Firms who already offer financial planning services are right to go under their current licensing arrangements.

2. Some are well underway with their education and licensing requirements or have recently obtained these to ensure they are qualified for 1 July. If this is your approach and you are planning on applying for a limited AFSL license, remember ASIC recommends that you lodge your application before 1 March to have approval by 1 July. Alternatively, other practitioners are becoming an authorised representative under a licensee holding an AFSL.

3. Others are considering outsourcing this service to a party who are already suitably licensed. They will provide the advice piece around SMSF to the client, whilst the current practitioner will continue to perform the tax work.

4. Another proportion of the profession is taking the good old stance of sticking their heads in the sand and hoping the issue won’t impact them. Some taking this approach comment that they don’t discuss SMSFs with their clients and therefore it’s not relevant for them.

5. Or finally, it may be time to shut up shop, consider selling and achieve a successful sale by 1 July. This, it seems is the favoured approach by practitioners considering retirement in the next couple of years, this legislative change pre-empting a slightly earlier exit.

Now, if you qualify yourself as the last of these five options, timing is critical. You need to get moving NOW and there are a couple of reasons why.

January to June is the peak time for transactions to ensure settlement is nicely tied in with the end of financial year.

Secondly, it will take you every bit of this time to achieve a successful outcome in this short four month window, especially if you are wishing to sell the firm yourself rather than engage a broker.

However, please be mindful that many practitioners have already experienced ASIC performing secret shopper activities with their firm, which will most definitely continue beyond the initial date of 1 July.

This is not legislation that’s suddenly going to experience an extension or complete reversal at the eleventh hour. Therefore it will be important to educate your personnel in exactly what your firm does and does not perform in this space. This way you will avoid potentially finding yourself in hot water should ASIC call on your firm and speak to someone other than its practitioners.

For those considering a practice sale, we would love to help.

Please contact Michelle on (02) 9233 4333 or via michelle@robknights.com.au