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Accounting, Financial Planning

Accounting bodies seek new advice solution

accountants financial advice model

Accountants will be asked for input on the shape of a new financial advice model aimed at reducing their regulatory burdens and the costs to consumers.

The accounting bodies will seek to develop a new model under which accountants can give some forms of financial advice but will be broader and more relevant to practice than the accountants’ exemption they were able to use in the past.

Chartered Accountants Australia and New Zealand (CAANZ) and CPA Australia are seeking member input from accountants who hold or operate under a limited Australia financial services licence (AFSL) on the shape of the new financial advice model.

In a note sent to its members, CAANZ stated it had launched a project to review the current limited licensing regime framework and follows a six-month consultation period with members via sharing knowledge sessions, focus groups and one-on-one appointments.

The note said CAANZ is “in the process of seeking further member feedback to produce an ideal model proposal which will seek to reduce regulatory burdens, provide an easier pathway for members to provide strategic advice, reduce costs thus making advice more affordable whilst at the same time protecting consumers.”

CAANZ financial advice leader Bronny Speed told selfmanagedsuper the review is in the exploratory phase at present as there were a substantial range of issues that were impacting accountants operating under a limited licence.

She pointed out the combination of the Future of Financial Advice (FOFA) reforms, the removal of the accountants’ exemption and subsequent introduction of limited licensing, the Australian Securities Investments Commission funding levy as well as new education and professional standards introduced by the Financial Adviser Standards and Ethics Authority had caused some accountants to leave the profession.

“The level and scope of change has become unworkable and unmanageable and the costs of implementing these changes has been huge. We are therefore calling for input on what a new advice model would look like and how we can return to providing clients with advice at a lower cost,” Speed explained.

“We are in the process of reviewing the current regulatory framework to develop an effective, permanent solution that would enable accountants to provide strategic advice around superannuation and SMSFs, in addition to the core activities an accountant is highly trained to perform.”

“At the same time, we are very conscious and respectful of the financial planning space and recognise the purpose and place of fully licenced advice. The two offerings should co-exist in an ideal world.”

Speed said CAANZ will soon be in a position to collate its findings with a model to then be circulated to members for further comment.

The accountants’ exemption was limited to only making a recommendation to either establish or wind up an interest in a SMSF and the limited level of support for its reintroduction was included in a joint submission by CAANZ and CPA Australia to the review of the Tax Practitioners Board (TPB).

This review was the trigger for the organisations to join forces on this member research project, Speed added, given both bodies were already actively involved in addressing the need for a better solution.

“The TPB review has raised the question of who can provide advice as well as who will regulate it,” she said.

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