The Institute of Public Accountants (IPA) believes it is accountants who should be filling the advice gap in Australia and has developed what it describes as a revised financial services licensing regime for qualified accountants recognising their existing qualifications and experience.
IPA chief executive, Andrew Conway said the Hayne Royal Commission had reinforced the importance of trust and seeking appropriate advice from professionals and this sentiment had been echoed by the Australian Taxation Office (ATO) which had acknowledged there was a gap between "full financial advice and smaller matters".
"For people looking for a solution to this gap, the IPA believes they should be able to get genuine advice and support from their trusted adviser; the accountant," Conway said.
"The Productivity Commission observed that 48 per cent of Australian adults indicated having unmet financial advice needs. So, obviously there is an advice gap in Australia which needs to be addressed," he said.
"To address these gaps the IPA has developed a revised financial services licensing regime for qualified accountants, which recognises their existing qualifications and experience," Conway said.
"Members of the three professional accounting bodies are answerable to high levels of professional and ethical standards, subject to ongoing quality assurance evaluations, and must maintain currency of knowledge through committed and continuous professional development and training," he said.
So long as the accountants are held to the same standards as financial planners. Best interest duty, comprehensive fact finde and statements of advice, I'm all for it. Accountants will then realise why regulation and legislation has made advice completely unaffordable, and therefore unavailable, for the people who need it most. They can't miraculously cut the cost of advice unless they are prepared to work form lower fees? This is a very naive statement by Andrew Conway.
I agree. Accountants already fill the advice gap. Illegally and inappropriately in many cases. By all means let's get them licensed so that ASIC will do something to stop the shoddy, conflicted advice so many accountants provide to their naively trusting clients. While accountants remain unlicensed ASIC allows them to get away with stuff licensed advisers would be crucified for.
Accountants are not a threat to the Regulators love affair with Industry Super so no action required. Suspect it will come when the Industry Funds star on SMSF sector - they have just about won the war on retail super.
yeah, wait till Industry funds start a war on SMSF's; and you bet they will soon. Accountants will be the next sitting ducks. they spend $60 to $90 million a year on advertising and destroyed retail funds.
What self serving rubbish this proposal presents.
If accountants were subject to the same scrutiny as applied to advisers people would be stunned by the gross incompetence and mediocrity of a significant number of practitioners.
I see plenty of financial statements and have spoke to many accountants and regularly come away with the same impression - these people would be useless as advisers. Before people scream about my accusations please note I was many years ago an accountant.
Even I struggle to find an accountant to do a decent good on my financial affairs and no way would I want them providing financial advice to anyone I know.
And here in lies the problem. Andrew Conway has as little understanding of the advice regime and costs as his colleagues in the CPA world who blew up $7-8mill of members funds.
The cost of advice is not the qualifications or even the experience, it is the process and liability that you take on.
Andrew you don't have the accountant disclaimer in advice. The clients signature does not remove litigation from the advice you have provided. Every piece of advice has to be in writing with vertical alignment conflicts such as SMSF administration fully disclosed. You cant just provide advice over the phone and then claim a misunderstanding later when the ATO takes your client to court.
Lastly you actually have to understand advice, not just how to invoice.
I'm probably in the minority here, but I'm actually all for this, provided it's done the right way. We have many clients that can't and don't really need full service from us any longer, save for the odd constribution or tax implication on drawdowns. I'd be happy for my referring accountant to take that work in exhchage for the 'meatier' client work that sits in our wheelhouse.
So the IPA want accountants to be able to provide financial advice without any of the regulation? They are dreaming!
Accountants should first work on professionalising their industry. The minimum education pathway to become a 'registered tax agent' under the TPB is a DIPLOMA. The minimum education pathway to become a 'qualified accountant' under the Corporations Act is also a DIPLOMA. Accountants have the LOWEST (education) entry of any white collar job.
No no no. Accountants are accountants and have a different skill set, different perspective and different work regime. They should be used in conjunction with financial planners and not as a substitute for financial planners.
Weren't accountants the ones who recommended clients to invest in plantation tax effective schemes that all blew up around the GFC? Give me a break.
As an accountant I don't agree with this proposal. Memories come flooding back of clients opening SMSF investing in the property of their business, without understanding the implications, let alone their own responsibilities.
We will just end up back where we started and the whole pain of the Royal Commission will be for nothing. Specialist knowledge is specialist for a reason, no one would want their GP doing brain or heart surgery on them, same in the financial services industry.
Andrew Conway you are sitting duck. Easy meat. Your naivety is equivalent to the FPA management 10 years ago. You have played into ISNs hands. To any of his organisation's members if you go it alone in the manner he is suggesting you are gone. You should be walking arm in arm with FPs, mortgage brokers etc and pushing back as one instead of canning each other in such a short term opportunistic ultimately self defeating manner.
Even when I reread these comments by Conway I cannot believe how stupid he is. Just a plainly dumb position to take given who is coming his way.