Govt should fund review of advice regulation – CPA Australia

6 February 2020

The complex, multi-layered nature of the regulatory environment covering financial advice is alienating many consumers and small businesses and placing substantial strain on accountants, according to major accounting group, CPA Australia.

In a pre-Budget submission filed with the Federal Treasury, CPA Australia has urged the Government to fund a holistic review of the regulatory frameworks for financial advice, with the objective of such a review being to ensure that regulations are fit for purpose and to reduce overlaps and costs.

In doing so, the CPA Australia submission pointed to the number of regulations and regulatory agencies touching advice.

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“For example, in relation to financial advice, advisers must comply with the Corporations Act, the Tax Agent Services Act, the National Consumer Credit Protection Act, plus there are obligations imposed under the ASIC Act and the Financial Adviser Standards and Ethics Authority (FASEA), amongst others. Often there is no harmonisation between these regulatory frameworks, or even within a single regulatory framework,” it said.

“Depending on how the licensing and registration system is set up, an accountant in practice may need to hold multiple licences and/or registrations to be able to provide one piece of advice,” it said.

The submission said CPA Australia’s research had found that almost 90% of accountants in practice believed the compliance burden of differing legislative frameworks was an issue, and less than a quarter said they had a clear understanding of their obligations.

“Further, this regulatory complexity is increasing the costs many millions of Australians pay each year to access the services of accountants, with almost 50% of practitioners stating that they increased their fees in the past year to cover increasing compliance costs,” it said.

CPA Australia pointed out that this was also happening at a time where the financial services sector was experiencing a major structural adjustment, with service providers exiting the sector in significant numbers.

“The impact of this structural adjustment is a growing advice gap in the market, which is to the detriment of those who need financial advice in an increasingly complex world with an ageing population.”

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Couldn't agree more, out of touch politicians and clueless regulators will once again, I strongly suspect, not even comprehend the issue properly let alone do anything constructive about it. They have failed on both counts for years now.

Small business and consumers will continue to suffer and these buffoons will keep getting paid.

All is not right with the world.

I suspect the solution our regulator/Treasury and Politicians will come up with is Industry Funds can provide cost effective advice via Intra Fund arrangements. As they (Regulators) have never looked and at any conflicts of this type of advice (ever wondered what an employee of a Trustee recommend - in house product??) it will be an easy political solution.

Seems our (Financial Planning) Associations have failed to plan and look ahead of the game that is being played out.

Yes, its amazing how non-salaried advisers cannot charge "fees for no service", but salaried & bonus paid advisers with Union super funds CAN charge their client's super funds fees for no service (ie for personal advice they never receive, and fees they cannot opt out of). Am happily explaining that to their members day in, day out. Even they can see they are getting ripped off. Outrage from consumer lobby & most left-wing pro-unions journalists? Virtually nil. Wakey wakey people.

Why cant the CPA agree that advice is advice no matter who gives it , they need to be under the same set of rules. If we worked together it would be easier for all of us. If accountants want to offer actual financial advice, thats fine, however we all need to be operating under the same structure for the good of us, and also the clients. Yes its red tape gone mad, this industry is just a project for those that seek to destroy it. If we keep going at different angles no wonder we never make headwind. The CPA, AFA, FPA, whoever, meet up , join together and fight as one , or else we are all going to drown in the red tape sea.

While I appreciate that CPA is aware of the issues, are they advocating because their members who are also in Financial Planning have been pushing this? Or is because accountants want exemptions to advise? Why now? - We've just had a RC with a raft of legislation - they now want another review of legislation and changes - how does a small business continue to cope with the change!

I'm not sure why CPA cares about this. Financial advice regulations are only enforced against licensed advisers. As long as accountants aren't silly enough to get a financial advisers licence, they can get away with giving as much dodgy, conflicted, unlicensed advice as they like. Same as mortgage brokers, real estate agents, super fund employees, and content publishers.


Not saying you're wrong though.

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