CPA Australia Advice Pty Ltd has been set up as a wholly-owned subsidiary of the association in order to provide “pure and transparent fee-for-service” advice to consumers.
CPA advisers will not take commissions of any sort or other “hidden incentives”, a statement from the accounting body said, including asset-based fees.
“As an organisation committed to the public interest, and approaching our 130th year, the CPA Australia Board has made the unanimous decision to take action and offer a solution,” said CEO Alex Malley.
“The company we are announcing today will set a new benchmark for professional and ethical conduct in making independent financial advice available to all Australian consumers.
“CPA Australia Advice represents a game changer for financial advice in this country.”
The advice business will operate in compliance with the Corporations Act definition of “independent” advice, the statement said.
CPA will now commence the process of applying for an AFSL and ACL.
ASIC chair Greg Medcraft is officially launching the business in Sydney today.
Should be interesting… surely this is not a boutique offer. We’re talking 200+ authorised reps here.
So inevitably, when one of them falls foul and breaches compliance, will that tarnish the CPA brand as a whole?
What could the breach be? Insurance possibly. A lack of insurance advice, or replacement of product, or duty of disclosure, and so on. Would they know how to manage a claim? Twist the Insurer’s arm when needed?
Or, considering alternatives to an SMSF? No? I guess it must be client instruction. Is that really in the client’s ? (I mean that as per FOFA legislation, not as a moral question).
We could go on all day here.
I wonder what CPA Members are going to make of this?
I would like to see the ratio of advice fees generated/invoiced versus the number of SOAs generated.
Is this supposed to be a stand-alone business with fulltime advisers or a mechanism where existing accountants become licensed to give advice in addition to tax?
I have worked for a large multinational where no planner was an accountant. I have also worked for a large national where all planners were also accountants. So from experience, accountants who are also licensed planners are “ACCOUNTANTS” & planners who are not accountants are “PLANNERS”. However, I also think it’s too easy for someone to call themselves an “accountant”. There’s plenty of tax agents around who call themselves accountants but who I have trouble thinking of as an accountant. As a starting point, to me, if your not a member of CPA or ICA and hence not subject to minimum educational entry standards, ongoing CPD and regular quality assurance review, then you can’t begin to call yourself an accountant. There are plenty more attributes that I believe are necessary to be labelled an accountant & which would likely exclude some existing members of CPA & ICA. So, re: scheme promoters, both accountants & planners face a common definition problem, shonks posing as professionals.
Was the bloke on a current affair last night a CPA.
GM, I not sure were you would include all those accountants who were also licensed to provide advice? All those accountants who put clients into forestry/agri schemes because they could get a tax deduction. Where would they sit?
I am intrigued by all the vitriol aimed at CPA…mainly because I’m assuming most of you are planners and not members of CPA. Don’t get me wrong, I am a member and I can attest that they do diddley squat for their public practice members. It does, however, beggar the question of what facts, if any, formed the basis of this opinion on them…which then leads me to ask on what facts do a number of you base your agreement with the assertion that there has always been a high level of Accountants going to jail for ripping off their clients? Obviously some of you have actually done the research to ascertain, (a) the number of accountants versus the number of planners sanctioned by the courts, and (b) The quantum value ripped off by accountants versus planners? How about publishing it if you did it, or referencing it if you quote it…as it would certainly silence the general view held by accountants that planners would fall in the majority of (a) and (b) above.
Well said Laurie Pennell you have hit the nail on the head. Next we will have the FPA body going into Accountancy. This has now become a joke…..
I am a member of the CPAs and a director of an independently owned licensee and wish to express my extreme displeasure that a so called professional body is applying for a licence to compete with the businesses of its members. Professional associations are supposed to be there to guide and help regulate their members, not to directly compete with them. Was this proposal ever put to the members to vote on or are the ivory tower management of the CPAs above this. This is a disgrace and to further muddy this they have Greg Medcraft at their launch. A regulator who has opening criticised Financial Planners on more than one occasion and hasn’t even been to see a planner to see what we actually do or clients. I can no longer call the CPAs a professional body as this is so unprofessional.
why is Medcraft involved in the launch, He is suppose to be independent umpire and arms length, How can ASIC scrutinise any AFSL application whilst their chairman is swilling red wine at the luncheon launch, WHERE IS Medcraft as independent umpire in all of this. This stinks rotton to the core.
[quote name=”Fiona”]this sounds so childish! It’s like a jealous fear you have- yes people trust their accountants and will take their advice if it is given . Only a tax accountant is qualified to give tax advice anyway and the number of unqualified advisors giving tax advice is amazing.[/quote]
But financial advisers are registered with TASA to give tax advice..
Smsf specialist courses.
Uni degree….
Hell some of us even have masters in finance subjects and are employed in accounting office so the clients actually get a full service. Not psudeo financial planning advice like, oh smsf are great set one up with your 59k, don’t worry about fees, insurance or even explains the obligations of a trustee???
Better brush up on your legislation if you wanna be an adviser.. It not the same as being an account at were you say what you like when you like and aren’t held accountable to any legislation or regulator… Ato. Pfft..
If CPA thinks thats all it takes to differentiate then they are 5 years behind. While CPA members were resisting APES 230 quality business participants in the financial advice space were inventing the new world.
CPA, you are such a laughable bunch we love having you publish stuff like this…. it makes the rest of us look great.
Bring on the competition, it keeps us all sharper as clients will pick planners that they feel comfortable with not how they price themselves or if they come from a CPA group or the group I’m with.
Well, there has always been a high level of Accountants going to jail for ripping off clients now they will do it as pretend Financial Advisers as well.
Look at the mess the SMSF industry is in thanks to Accountants
this sounds so childish! It’s like a jealous fear you have- yes people trust their accountants and will take their advice if it is given – go get your CPA if you are afraid to compete. Only a tax accountant is qualified to give tax advice anyway and the number of unqualified advisors giving tax advice is amazing.
Melissa, I for one have no concern about CPA’s tapping in to my clients. They are trained to think differently and most don’t get planning- if they did they would be planners already!
CPA gaining an ACL is fine but stating they will not be taking any commissions or hidden incentives is unrealistic- how ever will their brokers be paid- fee for service? Believe it when you see their Credit Guide as it would be a first in the industry. Or is this another no advice exercise and just charge extra fees on the tax side?
Oh those pesky “hidden incentives”, they’re everywhere trying to tempt us. CPA, Your marketing department needs the sack already.
If the reporting is correct I am sure that Mr Medcraft is resigning as opposed to actively endorsing one licensee over any others.
I was going through the comments and thought, “why are there so many bitter comments in here?” It clearly shows the financial “advisers” are threatened by the CPAs tapping in their market. Why is it like that? If you are sincere on your service to your clients and know you are good at it, why throw bad comments regarding accountants?
Fiona
Finally, Accountants will be held accountable. That should keep ASIC and the TPA Board busy for the next few years. I say it’s about time. Don’t get me wrong, there are a substantial number of high quality Accountants, BUT there are a number of accountants who have done wrong by their clients.
Sounds like a great opportunity to flog more SMSF’s to unsuspecting punters!
Davey, asic launched the bloody thing so id say there a shoe in. this could be good for independence but will be inreresting to see whetehr this is just accountants or whether IFAs can join.
I wonder if ASIC will grant them a Licence???
Accountants: Know the cost of everything and the value of nothing.
This should be interesting
Oh the irony! A group who fought against regulation so hard and for so long, is now endorsed by the regulator when they set up a license at the final hour when they were forced to do so. Meanwhile those of us who have embraced FSR and FOFA are treated with contempt. Where is the Opt-In regulatory guide, the approved codes of conduct, the flexibility around timing of FDS & renewal notices? Greg Medcraft – you are a disgrace!
What about all of the CPA’s that have a solid relationship with an advice practice or indeed run one themselves? Doesn’t this move just demonstrate that CPA have a lack of faith in their members current advice arrangements? Are they keen to canibalise their member’s businesses?
CPA’s self-serving language aside (to be expected), if it encourages more Australians to seek financial advice, this can only be a positive development for all concerned. It’s great for public awareness and terrific for competition. I don’t see the downside.
Greg Medcraft’s involvement in the launch just demonstrates his lack of better judgement, contempt for the advice industry and the CPA’s delusional view of financial planning.
I guess its marginally more credible than the real estate agents setting up an FP practice – Greg of course didn’t launch that service.
So a new licensee is being promoted at their launch by the head of ASIC.
That sounds legit, fair an impartial…. said no one ever.
time to head back to Choice Greg….
I don’t think that it is appropriate for Greg Medcraft to be launching this business. It will naturally be seen as ASIC promoting/approving this business, something they would not do for any existing license holder. Its fine for the CPA to come out and act holier the thou as to their structure now. But I’ll bet there were plenty of members of the main body who recommended tax driven forestry products and were paid handsomely for it (and that was diabolical for everyone). So its great to see them come into the market. But their structure now is nothing new and shouldn’t be promoted as such. Certainly not effectively endorsed by ASIC.
Awe come on guys – don’t be too hard on accountants. Some are really good and its not their fault they haven’t had experience doing what we do. We need to work together not bag each other. You are probably right – they will realise the work involved and bail out but help each other is my view on all of this. As for commissions – they do look bad until you actually try doing the work and realise – hey this is a lot and to run a successful business you need to charge a decent fee for service. They will learn the hourly rate will not work.
I welcome all ethical entrants to the profession. However they are only now going to “commence the process of applying for an AFSL and ACL”.
Years behind what is happening as usual. Wonder if they have heard of Best Interests yet. Wonder if they will cope with the paperwork required?
I wish them all the best, there are great Accountants and bad Accountants but I also wonder if they have heard of compliance?
Is it me or something else but Greg Medcraft ASIC chair selling the new business venture. Hmmm smacks of bias!
fantastic – I’ve always said you can’t give appropriate advice for people in business unless you are an accountant…
If the ASIC Chair is launching an AFSL, his very first words BEFORE doing that better be; “I have resigned as ASIC Chairman”
I think it is highly inappropriate that Greg Medcraft should be associated in any way with the launching of such a business. This shows incredibly poor judgement for a person in his position.
How many times in the past have we heard accountants bang their hollow drums and bleat on about entering planning as a paragon of virtue to clean the scourge off a land darkened by us dastardly planners, only for it to become a whimper or else if successful, the money becomes too attractive and they do interesting schemes like the trees etc?
Welcome to world of compliance and tighter reg’s! Not certain your scribbled ‘strategies’ on loose pieces of paper, chargeable 6 min increments and accountant’s mindset will ever be able to compete with that as a real threat to existing successful IFA models out there…
As for adding value into planning, should be worth it purely from an entertainment value…
Well done Alex.
You’re joining the benchmark set by members of the IFAAA (http://www.ifaaa.com.au);
You’re the new kid on a growing block that already exists. Welcome.
just like every financial planner is looking to do by law – fee for service? gee you guys are ahead of the curve ….NOT