On Friday, ASIC chairman Greg Medcraft appeared alongside CPA Australia CEO Alex Malley for the launch of CPA Australia Advice Pty Ltd, which the regulator described as a “bold initiative” and praised for being a “nudge” for the industry to improve “quality and access to advice”.
Many stakeholders indicated their disapproval of Mr Medcraft’s involvement as reflective of bias – both in the ifa comments section and in letters to the editor, with a number calling on the ASIC chair to resign over the incident.
However, an ASIC spokesperson told ifa that Mr Medcraft is “not advocating one model over another” and that the corporate regulator is instead in favour of “supporting initiatives which provide these people with choice in their selection of a financial adviser”, adding that ASIC hopes the CPA advice model will achieve this goal.
Asked whether Mr Medcraft’s endorsement would have any bearing on CPA’s intended application for an AFSL, the spokesperson replied “certainly not” and explained that “every applicant has to comply with the law and this initiative is no different”.
In launching the new venture, Mr Medcraft also indicated ASIC “would very much welcome working with CPA Australia” on the development of an ASIC-approved code of conduct – the first of its kind.
“That would be a major step forward,” Mr Medcraft said.
Meanwhile, a statement on the CPA Australia website explains that only CPA members will be invited to use the new licence should it be granted.
The statement also says that CPA chose to go public before, rather than after, it had successfully completed an AFSL and ACL application because “everything we do is about transparency and importantly, we wanted to provide our members with time to prepare for transition to the new offer”.
“Having witnessed the steady erosion of the community’s trust in the financial planning sector in Australia over recent years, CPA Australia’s Board has determined that we are going to make a major contribution in the public interest to rebuilding confidence,” the statement said.
Public “servant” with no idea what a conflict of interest actually is!
This person has given a glowing report to an APL that doesn’t even exist.
ASIC is a incompetent, bumbling disaster which needs a serious clean out, starting with Medcraft.
[quote name=”Paul”]I cannot imagine what ASIC was thinking when they thought this was a good idea.[/quote]
They weren’t thinking.
I cannot imagine what ASIC was thinking when they thought this was a good idea.
I’m planning to apply for a new AFSL in July. Once ASIC approves my application I’m assuming that Greg Medcraft will agree to appear at a press conference I’m planning to hold to announce my new venture. I can’t see why he wouldn’t – is my new venture any different from the CPA’s proposal? Surely I can expect the same support and treatment? Surely….?
[quote name=”Jeff Morris”]Nobody at ASIC was sacked or resigned over the total pigs ear they made of CBA so I can’t see anybody at ASIC resigning over this latest error of judgement.
That’s the problem with ASIC – nobody ever has to take responsibility for their stuff ups.
The root cause of most of the problems in the financial planning industry is the utterly useless regulator.[/quote]
Here here
As someone who was offered an investment in olives, trees and unlisted property by my accountant for six straight years I am glad that ASIC believe that accountants providing financial advice would be a major step forward. For reference no SOA, a general chat for a fact find and all of the recommended investments being frozen or going into administration represents my personal experience of using an accountant for financial advice, luckily none of the recommendations were taken. Mr Medcraft should resign with this being even more so based on the article as he doesn’t even seem to identify the conflict of interest that applies.
Nobody at ASIC was sacked or resigned over the total pigs ear they made of CBA so I can’t see anybody at ASIC resigning over this latest error of judgement.
That’s the problem with ASIC – nobody ever has to take responsibility for their stuff ups.
The root cause of most of the problems in the financial planning industry is the utterly useless regulator.
I was startled by the line…
Medcraft also indicated ASIC would very much welcome working with CPA Australia on the development of an ASIC-approved code of conduct the first of its kind.
I thought FPA and AFA had codes of conduct which have been awaiting ASIC’s approval for some time. Is Medcraft saying he will be approving the CPA code once it’s developed, but won’t be approving the codes of other associations?
Yes Virginia there is a Santa Claus
And it comes in the form of a taxpayer-funded bureaucrat endorsing your business model
What a dream run. The CPA AA AFSL has not been issued but still gets a glowing endorsement from the chief regulator. PR heaven.
But do not furrow your brow – only members of the CPA can become ARs with CPA AA. Whew, now I feel much better.
It is sort of like a doctors professional body assuring us there will not be any more deaths during surgery, nor infection post-surgery
A regulator who picks winners in a market should be wound up !
This is GREAT NEWS ! – If I move from my present bank aligned dealer group. I’m having a press conference as well – how Greg can spare the time to endorse my new venture as well.
Most disgusting bias I have ever seen.
A Royal Commission into CBA and ASIC is needed. ASIC have in my view NO credibility and we need an explanation into why ASIC is so incompetent, are they really that hopeless or are their incentives for them to look the other way – it would certainly seem to be so !!
Anyone who does not believe that ASIC’s advice mantra is : Accountants, lawyers and for anything else go and see Centrelink, is delusional.
It remains to be seen whether accountants will be able to cope with the provision of properly regulated financial advice. In the past they gave this advice away for free. There was no need for proper fact finding or statements of advice. For the ASIC chairman to say the CPA’s AFSL (which doesn’t even exist yet) will improve the quality of advice is laughable. It could turn out to be a flop. We don’t know yet. Most accountants I speak to are busy rushing around trying to work out their licensing options or build referral relationships with planners so they can keep exploiting the SMSF gravy train. That is the extent of their interest in financial advice. I think Greg Medcraft has just exposed how incredibly out of touch he is.
There’s no logical reason for ASIC to publicly endorse CPA or any other potential applicant.
Our industry requires and deserves a more meaningful explanation, otherwise pack your bags Mr Medcraft get your pension and move on.
This could be a good thing as i would assume less clients will be put in to SMSF and tree plantations, given that they now need to demonstrate ‘clients best interests’ and document it
I would also assume that fee disclosure might put a few off
Good,
No more continuing debate about Accountants licensing & the removal of the exemption. Now they can all just go with the easy option of being licensed through their own professional body.
Will work for some presumably
There should NOT be an issue here. We should all welcome the move as a positive sign for the industry moving forward. Time to work towards a common goal and welcome a new player into the market
I am sorry ASIC but that poor explanation for
Greg Medcrafts poor judgement is simply not
good enough, perception is reality . Medcraft
should resign his position immediately or be removed.
.
This can’t be anything other than a good thing given the upside it brings to the industry. But it cant be without its challenges….APES230 is the accountants high water mark for ethics and it bans percentage based fees….lots of CPA’s use this method of payment. Secondly the accounting profession was not without fault in agri business placements and property failures such as Westpoint….so Licensing will be a compliance challenge for the CPA’s but a good one. Interesting to see what they do about limited licensing and surveillance thereafter.
Having shown his true colours, with an act that is indefensible, Medcraft now has to decide; jump or wait to be pushed.