There would have been many in the Australian accounting community who last week breathed a sigh of relief when they read the documents to be dealt with by the Accounting Professional and Ethical Standards Board (APESB) at its most recent meeting last Friday (5 April).
Those documents, dealing with APES 230, revealed the degree to which the Institute of Chartered Accountants (ICAA) and CPA Australia had been successful in lobbying for change to the hard-line position outlined by the board last year – a position substantially more draconian than that required under the Government’s Future of Financial Advice (FOFA) changes.
While the final shape of APES 230, as outlined in the board papers, is by no means a replica of the FOFA legislative and regulatory requirements, it much more closely aligns to the requirements which will need to be met by financial planners and will ensure that accountants providing financial advice are not unnecessarily commercially disadvantaged.
The vigour with which the ICAA and CPA Australia pursued the amendments was clearly owed to the distressed feed-back the two organisations received from members heavily involved in the provision of financial advice – and the suggestion that those members might seek to protect their commercial positions by resigning their memberships.
The Institute of Public Accountants – being differently constituted to the ICAA and CPA – had declared it would ignore APES 230 and generate a standard of its own better suited to the needs of its members.
Given the changes to APES 230 indicated in the board documents, there ought to be no reason for accountants who give financial advice to resign their memberships of the major accounting organisations, or for the IPA to generate its own standard.
However feedback received by Money Management around its coverage of the APES 230 issue clearly indicates that the major accounting organisations need to deal with the existence of a divide between those members who provide financial advice and those who focus on the more traditional accounting sphere.
Indeed, it seems entirely probable that the APESB’s original approach to APES 230 owed more to the influence of the latter than it did to the former.
Money Management does not possess sufficient data to assess the number of accountants providing financial advice as a proportion of the entire accounting profession, but on all the available evidence financial planning has represented a growth area for many accountancy practices for many years.
While some accountants may hold themselves out to be “better” than financial planners, their colleagues’ reaction to the original shape of APES 230 indicates that professional ego rarely beats commercial self-interest.
