The Board of CPA Australia confirmed to members and sister title Accountants Daily this afternoon it has decided to exit the business of CPA Australia Advice.
The move will be finalised by the end of the calendar year, and authorised representatives have been notified of the change.
CPA Advice has struggled from its launch in 2015 to attract members, falling hundreds short of its business projections by year end 2017. It’s also reported a combined trading loss of $7.4 million in November last year since inception.
Housing a dealer group under the CPA Australia brand has also posed severe regulatory conflicts for the association, including the renewal of its professional standards scheme last year, which provides liability coverage for members in public practice.
The Board also noted the potential for CPA Advice to prevent CPA Australia from being a monitoring body under the federal government’s incoming education requirements, meaning members would have to join another body to be accredited to provide financial advice.
SMSF Adviser has long questioned the viability of CPA Advice, you can read more about the troubled dealer group’s history here.
More to come.
katarina.taurian@momentummedia.com.au
Also,the inconvenient truth is 923A business models don’t work unless your into direct property transactions and circumventing the FOFA bans on commission.
The Banks will now have total control – I am angry and ASIC appears to be hurting the small players and assisting to grow the Banks!!
ASIC has a lot to answer for following the total chaos it has created and continues to create for SMSF’s.
We are very quickly becoming and maybe already have become the most over regulated over compliance focussed expensive financial economy in the western world.
It is little wonder so many businesses are being sent to the wall and should be a real wake up call for everyone deciding to continue to invest in the SMSF sector.
Tough for the advisors and staff. I wonder how much thought was given to their futures.
I am a member of CPA who when this was originally announced expressed my annoyance that CPA was setting up a business in direct competition with those being run by their members. I also questioned how a professional association could be in this business as well as monitoring the professionalism of their accountant members.
I had a heated telephone conversation with the then President who basically said if I was not happy then I could simply resign my membership. This comment was made to a 40 year member.
Now that my concerns have been vindicated, why should CPA members have to wear the $7.4 million in losses which have built up as a result of this ill conceived and executed plan conceived by Alex Malley.
Surely the directors of CPA Australia and CPA Advice should have to refund all salary and allowances paid to help cover the loss. Mr Malley should also have to repay his exorbitant severance payment towards the loss as well.
This from a group a so called well qualified accountants who obviously used overly optimistic assumptions when preparing the business case for CPA Advice.
This should not be allowed to ever occur again.
This begs the question of the broader disaster ASIC has created with the licensing changes, it is all a mess.