Like many other industries, professionals working in the financial services sector must adhere to certain laws and regulations. Despite this, many operators still choose to dispense financial advice without the correct licenses or certifications.
Once upon a time, these unlicensed accountants could fly under the radar undetected, but recent advancements are set to shake things up. In 2017, the Australian Securities and Investment Commission (ASIC) announced it would be trialling machine learning software to help catch people out.
How does it work?
Using algorithms for both structured and unstructured data, ASIC has tailored machine learning software to scan the web and find unlicensed accountants marketing their services online. The software visually maps people and entities across the tax office’s evidence database, enabling ASIC to cast a wider net for non-compliant operators with greater accuracy. The ability to review website content en masse like this will make identification easier and faster than ever before.
What happens when an unlicensed accountant has been identified?
Once suspected of operating without a license, unlicensed accountants typically receive a letter from ASIC asking for more information about their services and a written response within 14 days. The letter may also ask those suspected to:
- Explain why they don’t need a licence
- Provide any legal advice that supports their position
- Outline the steps they’re taking to obtain a licence if required
Are you at risk?
An Australian Financial Services (AFS) licence is required in order to run a financial services business in Australia. If you’re unsure about what services you’re licensed to offer, it’s wise to double check and ensure you’re only offering services that fit into this remit. If you don’t hold an AFS license but have a website or other marketing materials that promote financial services, then you could be in breach of financial services laws.
You’ve received a letter. What next?
If you’ve received a letter from ASIC requesting more information, you will have 14 days to lodge a written reply. Fines can be imposed if the matter isn’t taken care of, so don’t ignore the letter or delay your reply. If you’re unsure how to respond, speak to a professional advisor first.
It’s only a matter of time before ASIC identify unlicensed accountants operating in Australia. If you think you could be at risk, act now. For more information on how to apply for a licence, visit the ASIC website.