Throughout CPA Australia’s history, we have had a track record of acting without fear or favour. Our commentaries on key issues of public policy have always been underpinned by a commitment to the public interest.
Consistent with this, CPA Australia has announced we will be entering the financial advice market in Australia. We have witnessed too many Australian consumers suffer as a result of poor financial advice and we have seen too many media reports about the failings of large financial planning institutions.
Yes this is a bold move, but our firm view is we can no longer sit on the sidelines watching and talking about the problems without stepping up – in the public interest – and making a contribution to rebuilding trust in the financial advice market in Australia.
To do this we have established a wholly-owned subsidiary, CPA Australia Advice. Why a wholly-owned subsidiary? For one simple reason – consistency of culture. We regard it as critical our new company has the same culture and professional standards that are the cornerstones of CPA Australia. That culture is about independence, transparency, integrity, compliance and continuous learning. It also includes our fundamental objective to act in the public interest.
Independence and transparency — the words that have been missing in the sector for far too long, but are exactly what those seeking financial advice are crying out for.
The new company’s commitment will always be to the client’s best interests. Our focus will be on what is right for the client, not for the adviser. This means no commissions, no hidden incentives, no asset-based fees – just pure and transparent fee-for-service.
CPA Australia Advice’s operations will be consistent with section 923A of the Corporations Act 2001, which allows the use of terms such as independent, impartial and unbiased. The company will also be consistent with APES 230 Financial Planning Services, the professional standard for our members engaged in the provision of quality and ethical financial planning services.
Our new company will be applying for an Australian financial services licence (AFSL) and an Australian credit licence and, subject to the approval process, it is our intention to have CPA Australia Advice operational in 2016 – our organisation’s 130th year.
Our move into this sector has been driven by our commitment to the public interest. However, CPA Australia Advice will also provide members of CPA Australia who are in public practice with a new independent pathway to provide financial advice to their clients.
Under the model they will be authorised to provide this advice to their clients within their public practice.
Licensing members and future members of CPA Australia, and providing pathways to encourage eligible new entrants also ensures all advisers under CPA Australia Advice have the same strong education and professional backgrounds, fundamental to providing quality advice.
CPA Australia Advice will also enable us to strengthen our commitment to members who are already in this sector, including those members who now hold or intend to hold their own limited AFSL, as it will provide us with opportunities to provide new levels of support and resources.
We go into this with our eyes wide open. We know the big financial institutions, some of the biggest companies in Australia, dominate this sector, but we believe Australian consumers seeking financial advice deserve a fully transparent and independent alternative.
This is a significant investment and we’re here for the long haul. While the potential at multiple levels is enormous, at a personal level nirvana for me is that all young people who are about to enter the market see this as the beacon for the right way to go about financial advice and that we create a sustainable new generation that regards independence as their core credibility in the market.
This initiative will allow CPA Australia to make a major and lasting contribution – without fear or favour and in the public interest — to rebuilding the community’s trust and confidence in financial planning.