Three major accounting bodies will not seek the reintroduction of the accountants’ exemption to provide SMSF advice, but will work together on reducing the complexity of regulations around the provision of financial advice.
The chief executives of CPA Australia, Chartered Accountants Australia and New Zealand (CAANZ) and the Institute of Public Accountants (IPA) released a video late last week in which IPA chief executive Andrew Conway announced the joint stance on the accountants’ exemption.
“Rather than bringing back the limited accountants’ exemption, each of our accounting bodies in our consultation with our various members has shown that we need to review the regulatory frameworks,” Conway said.
“We have a clear focus to revisit definitions, licensing regimes, and to harmonise obligations when members operate under multiple regulatory frameworks to provide the one piece of advice.”
CPA Australia and CAANZ had already stated they were opposed to a reintroduction of the exemption, but, as recently as mid-September, the IPA called for its reintroduction in a submission to Treasury’s review of the Tax Practitioners Board.
Responding to a selfmanagedsuper inquiry as to why it had changed its stance, the IPA stated: “What was the accountants’ exemption is no longer fit for purpose, however, we, in collaboration with the other two bodies, are critically assessing the current regulatory regime with an objective of reducing burden and creating a more efficient regulatory framework.”
Conway added: “There is clear market failure when an accountant is not able to have a strategic conversation with a client. This is not about product advice, but advice linked to taxation and other circumstances. Rather than an ‘exemption’, we are seeking a new regulatory framework to recognise the expertise and unique position the accountant has in the client relationship.”
Commenting on the joint approach to regulation taken by the three bodies, CAANZ chief executive Rick Ellis said the “bodies were working together on a broader and more robust solution to the complexity of the current regulatory framework” to allow people to access advice they could understand.
“The failures that were revealed from the banking royal commission brought to light the extreme complexity of the current frameworks in financial advice, which are not in sync with each other,” Ellis said.
CPA Australia chief executive Andrew Hunter pointed out the new education and professional standards under the Financial Adviser Standards and Ethics Authority, the current review of the Tax Practitioners Board and the implementation of the recommendations from the royal commission were likely to add further complexity and restricted the ability of accountants to engage with clients.
“Accounting professionals need the flexibility to talk and engage with their clients, but this is often problematic when that advice falls under multiple regulatory frameworks in the same conversation, or even the same sentence.”
Conway said the shared goal of the three bodies was to reduce the regulatory burden on their members to retain financial advisers in the industry and to prevent the creation of an advice gap.
The video statement did not outline the shape of the regulatory framework being considered by the three bodies, but Hunter added all three bodies were seeking member feedback, including client experiences, to provide background to its advocacy work.