Major accounting groups CPA Australia and Chartered Accountants ANZ (CA ANZ) say they do no want re-establishment of the accountant’s exemption – they want changes that go a whole lot further with respect to accountants giving advice.
In the face of calls by the Institute of Public Accountants (IPA) for the re-establishment of the accountant’s exemption, the two big accounting organisations said they wanted a wholesale review of the advice sector which had become mired in complexity.
The two organisations issued a joint statement arguing that reinstating the accountant’s exemption would amount to little more than putting a band-aid over a very deep wound.
It said that both organisations strongly believed that accountants should be able to provide services benefited their clients and supported the public interest “but reintroducing a mechanism that, due its extreme limitations, is no longer relevant in this current, increasingly complex financial advice environment is unlikely to achieve this objective”.
“There is widespread agreement amongst members that the current regulatory and licensing regime for strategic advice needs work,” Group Executive, Advocacy and International, Simon Grant said. “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.
“Both professional bodies are undertaking extensive consultation to find a solution, ranging from a public practice member survey to nation-wide workshops to gather feedback.”
CPA Australia external affairs general manager, Paul Drum said the objective of the Future of Financial Advice (FoFA) reforms had been to ensure advice was in the best interests of clients and not put out of reach of those who would benefit from it.
“This has arguably not been achieved,” he said.
“CA ANZ and CPA Australia are calling for a wholesale review of the current financial advice frameworks to address regulatory complexity,” Drum said. “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.”
The two accounting bodies said they had submitted on behalf of members and in the public interest that:
• Tax is a key consideration for the majority of financial planning strategies, it is material to the advice and recommendations and not incidental.
• The accountants’ exemption only permitted the recommendation to either establish or wind up an interest in an SMSF. It was so limited that it did not even allow a recommendation to not establish an SMSF. Restoring such a limited exemption is not going to address the need to enable affordable, accessible and quality advice by trusted advisers.