The Australian Securities and Investment Commission said it does not believe accountants provide "more compliant or better financial advice" than financial advisers.
In its submission to the Review of the Tax Practitioners Board released by Treasury, the regulator said it does not believe accountants should be exempt from the Australian Financial Services license regime, but that the system does need simplifying.
"While we do not consider that there is any justifications for re-instating the old accountants' exemption (or a modified version of it), we do acknowledge that there are aspects of the accountants' limited AFS regime (which was introduced when the exemption was removed) that are difficult to comply with," the submission said.
The regulator noted that the removal of the accountants' exemption means that unlicensed accountants cannot provide recommendations about whether to establish an SMSF, acquire an interest in an SMSF or wind up and SMSF.
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"This type of advice is fundamentally different to providing tax advice or to advising a client on the process of setting up an SMSF once they have already made the decision to establish one," the regulator said.
ASIC said there are a range of exemptions which still allow accountants to provide financial product advice that is incidental to their services without holding an AFS license, including exemptions for tax advice and for advice about establishing, operating and structuring an SMSF.
"The decision to set up an SMSF is one of the most significant steps a consumer can take in relation to their retirement savings. Our view is that it is appropriate that advice about whether to, or not to, set up an SMSF falls within the scope of the AFS licensing regime," ASIC said.
The regulator said the former exemption meant that there was not a "level playing field" for accountants, and that it appeared to distort the conduct of accountants.
ASIC said: "It appeared to lead accountants to recommending SMSFs because this was the only financial advice they could legally provide without an AFS license, even when an APRA-regulated superannuation product would have been more likely to be in their client's interest."