Chartered Accountants Australia and New Zealand and CPA Australia have come out in defence of their decision to not support a return of the accountants’ exemption, one of the options floated by Treasury in its review of the Tax Practitioners Board.
Both accounting bodies have stood by their decision, noting that the “extreme limitations” of the accountants’ exemption meant that it was “no longer relevant in this current, increasingly complex financial advice environment”.
The accountants’ exemption, which was repealed in 2016 as part of the Future of Financial Advice (FoFA) reforms, had only permitted accountants who were members of the three accounting professional bodies to help with establishing and winding up an SMSF.
“There is widespread agreement among members that the current regulatory and licensing regime for strategic advice needs work,” said Simon Grant, CA ANZ group executive, advocacy and international.
“So rather than putting a band-aid over a very deep wound, we need to look at the issue holistically and find a solution for strategic advice that is fit for purpose, permanent and serves Australian mums and dads.”
The joint decision by CA ANZ and CPA Australia to not back the option was first revealed by Accountants Daily, alongside news that the Institute of Public Accountants and the Tax Institute were open to exploring a return of the accountants’ exemption.
Accounting software boss Ron Lesh of BGL, who has been a key figure in lobbying for a return of the accountants’ exemption, was critical of both CA ANZ and CPA’s decision, suggesting that they had failed to measure members’ sentiments.
Addressing FoFA failures
CPA’s Paul Drum believes the current debate misses the real issue of the failure of the FoFA reforms, which was to provide affordable and accessible financial advice to Australian consumers.
“The objective of the Future of Financial Advice reforms was to ensure advice is in the best interests of clients and advice should not be put out of reach of those who would benefit from it, and this has arguably not been achieved,” Mr Drum said.
“CA ANZ and CPA Australia are calling for a wholesale review of the current financial advice frameworks to address regulatory complexity.”
The external affairs general manager added: “This complexity has been caused by years of layered regulatory reforms, without appropriate consideration to ensure these reforms are meeting their policy intent.
“The wholesale review must identify policy changes needed to ensure that consumers can access quality, affordable advice from their choice of trusted adviser.”
Accountants Daily understands both CA ANZ and CPA Australia will now undertake extensive consultation with their membership base, including public practice member surveys to nationwide workshops, in a bid to gather feedback to work towards a solution.
FOFA stands for “Fear of Financial Advice”
I must have missed when the CPA asked me as a member of my thoughts before they made their decision about what the members want! We are back to this type of governance again are we?
Let me guess, they want to get up a licence group again?
I’m moving to IPA, they really look in touch with our profession. CPA and CA a bunch of bureaucrats
Meanwhile advice is too expensive for the people that really need it now…
totally disappointed in both the CPA and ICAA. We members thought that our (?) professional bodies were there to look after their members, obviously we were wrong so why do we need to pay our professional fees to them?
As a CPA member, I am incensed at such a stance. Given the recent mismanagement in relation to the former CEO, can’t even remember his name any more, and the massive payout all related to the FoFA stance and CPA’s foray into the realm of advice and the costs imposed on right thinking and honest Australian SMSF members I am considering cancelling my longstanding membership. I am a member or IPA and full marks to them and TIA. Pegging us against insurance salesman was alway a bad idea in respect to credibility. Now there are vast imposts on the financial planning sector so they can match the credibilty that we accountants enjoy.
Pegging decent advisers against accountants who piled their clients into forestry schemes to “solve their tax issues” is also a bad idea in respect to our credibility. It’s an absolute joke that all the loses with Agri investments have been slated home to financial planners when the overwhelming amount of money was placed by the “most trusted advisers” who also operated a planning business or had single issue license direct with the Agri providers….but hey, all planners are “insurance salesmen”…
All taxation & regulatory legislation in Australia is layered with amendments to fix unintentional consequences. That is the nature of how this country works.
Again, the position of the accounting bodies proves how far out of touch they are with their memberships. Holding out for a wholesale review of the current financial advice framework demonstrates pure idealism and a lack of practicality. A wholesale review won’t happen, and if you were practical about it you would support any band-aid fixes that reduce regulation for the accounting profession.
The accounting bodies need a reality check on their role. It is to self regulate so that Government has no need to intervene. They missed that boat in a big way the last time the framework was reviewed. The result was that the Government had to step in and regulate our industry.
Any claw back of the freedoms to advise that we have lost, because of the accounting bodies previous inaction, would be welcome.
Stop tilting at windmills, embrace small wins like a return of some accountant exemptions and perhaps the ideal will be achieved over time.
Ok, it needs work. But bring in the bandaid while you’re in your CA and CPA talkfests.
“This complexity has been caused by years of layered regulatory reforms, without appropriate consideration to ensure these reforms are meeting their policy intent”. You forgot the most important words of all…..and greed.