The widespread uptake of professional accounting, tax, superannuation and financial advice could create an overall boost to the Australian economy of more than $600 billion a year, according to new research released by CPA Australia.
The research, which was conducted in conjunction with CoreData, showed that if properly implemented professional advice was available to all Australians, the total economic uplift could be $630.3 billion a year and age pension costs could be cut by 21.6 per cent.
CPA Australia external affairs general manager Dr Jane Rennie acknowledged this widespread use of professional advice, which also includes business and mortgage-broking advice, was unlikely, but said even a fractional increase could still result in a benefit in excess of $100 billion a year.
“Over 60 per cent of the Australian population does not currently receive professional advice. This means that millions of people and small and medium-sized businesses are on their own when it comes to managing some of the most stressful and complicated aspects of our lives,” Rennie said.
“While the potential economic benefits are tremendous, realistically it’s unlikely we will ever have a fully advised population. However, any increase in the uptake of professional advice from its current level could deliver an economic windfall.
“If an additional 10 per cent of the population received properly implemented professional advice, the potential contribution to Australia’s economy could be approximately $112.8 billion per year.”
CPA Australia stated the economic benefit figures were based on a macroeconomic model that measures income risk in scenarios where professional advice was absent and where it had been properly implemented. The research was based on a survey of 1244 consumers and 815 small and medium-sized enterprises (SME) about the intangible benefits of receiving professional advice.
From that survey and model, the research quantified the financial benefits for individuals of receiving professional advice and found it could add 30.6 per cent ($24,716 on average) to a person’s annual income.
“The financial benefits are even greater for young people, who could boost their income by more than 40 per cent, and retirees, who could gain an additional 35.7 per cent in their hip pockets,” Rennie said, noting that while the benefits of advice were clear, many people still did not seek it due to how advice was segmented across sectors.
“Structural issues seem to be deterring people from seeking professional advice,” she said.
“Consumers and SMEs view professional advice very differently to lawmakers. They expect to see one qualified adviser for a range of taxation, business and financial advice needs. But the regulatory framework isn’t designed for this.
“To realise the potential benefits identified in our research, we need to increase the accessibility and affordability of professional advice. This requires a system where consumers and SMEs can seek the advice they want from their chosen professional adviser.”
Late last year, CPA Australia, in conjunction with Chartered Accountants Australia and New Zealand and the Institute of Public Accountants, announced it would not seek the reintroduction of the accountants’ exemption to provide SMSF advice, but would work towards reducing the complexity of regulations around the provision of financial advice.
