New rumblings have emerged within major accountancy group CPA Australia – this time over a review commissioned by the organisation into its advice subsidiary – CPA Australia Advice.
One of the CPA Australia members who raised issues which led to the eventual departure of CPA Australia’s former chief executive, Alex Malley has now used social media to point to $600,000 paid to consultancy PwC to examine what went on with respect to CPA Australia Advice.
The member, Brett Stevenson said that with revenue of just $47,000, CPA Australia Advice had after 19 months incurred expenses of $7,451,000 of which $1,580,000 was paid to CPA Australia directors and senior management.
He claimed that in recommending the shut-down of CPA Advice, the PwC report had actually stated the obvious.
Stevenson has questioned whether tenders were called for the review of CPA Australia Advice before it was awarded to PWC.
Comments
The advice business is not easy. Regulation is making it more difficult every day - not sure how this helps the consumer.
a loss of 7.5M over 19 months, take advice from accountants anyone?
If the advice business has historically been mainly commission driven, does the performance of CPA Australia Advice over the past 19 months -- revenue of just $47,000 -- point to a larger malaise that is independent of "regulation".
there was just no appetite for it. Accountants who are in planning are already in with their own license or other licensees. Also, the accounting bodies failed to get APES230B up as I understand it, whereby accountants had to declare they were receiving nil commission/trail commission/were independent, i.e. had no affiliated licensing. Major backlash caused this to be put aside, the accountants are in the same boat as the planners largely, if they are in FP.
I always thought that CPA Australia Advice was an attempt by the then CEO of CPA Australia to build a financial advice business on the back of CPA Australia's reputation. I think the business's apparent failure says more about the advice business in general than it does about the reputation of accountants, or at least I hope it does.
This was a failed exercise driven primarily by an individual's obsessive ego, self image and drive for success.
The mistake was made at the appointment stage..more due diligence, more prudent consideration, more insight and the story may well have been much different.
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