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A straightforward return of the accountants’ exemption would simply be “putting a band-aid over a very deep wound”, say CA ANZ and CPA Australia.
CA ANZ, CPA defend accountants’ exemption decision
20 September 2019
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7 minute read
Chartered Accountants Australia and New Zealand and CPA Australia have come out in defence of their decision to not support a return of the accountants’ exemption, one of the options floated by Treasury in its review of the Tax Practitioners Board.
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Both accounting bodies have stood by their decision, noting that the “extreme limitations” of the accountants’ exemption meant that it was “no longer relevant in this current, increasingly complex financial advice environment”.
The accountants’ exemption, which was repealed in 2016 as part of the Future of Financial Advice (FoFA) reforms, had only permitted accountants who were members of the three accounting professional bodies to help with establishing and winding up an SMSF.
“There is widespread agreement among members that the current regulatory and licensing regime for strategic advice needs work,” said Simon Grant, CA ANZ group executive, advocacy and international.
“So rather than putting a band-aid over a very deep wound, we need to look at the issue holistically and find a solution for strategic advice that is fit for purpose, permanent and serves Australian mums and dads.”
The joint decision by CA ANZ and CPA Australia to not back the option was first revealed by Accountants Daily, alongside news that the Institute of Public Accountants and the Tax Institute were open to exploring a return of the accountants’ exemption.
Accounting software boss Ron Lesh of BGL, who has been a key figure in lobbying for a return of the accountants’ exemption, was critical of both CA ANZ and CPA’s decision, suggesting that they had failed to measure members’ sentiments.
Addressing FoFA failures
CPA’s Paul Drum believes the current debate misses the real issue of the failure of the FoFA reforms, which was to provide affordable and accessible financial advice to Australian consumers.
“The objective of the Future of Financial Advice reforms was to ensure advice is in the best interests of clients and advice should not be put out of reach of those who would benefit from it, and this has arguably not been achieved,” Mr Drum said.
“CA ANZ and CPA Australia are calling for a wholesale review of the current financial advice frameworks to address regulatory complexity.”
The external affairs general manager added: “This complexity has been caused by years of layered regulatory reforms, without appropriate consideration to ensure these reforms are meeting their policy intent.
“The wholesale review must identify policy changes needed to ensure that consumers can access quality, affordable advice from their choice of trusted adviser.”
Accountants Daily understands both CA ANZ and CPA Australia will now undertake extensive consultation with their membership base, including public practice member surveys to nationwide workshops, in a bid to gather feedback to work towards a solution.
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- Regulation has failed mums and dads, and a complete accountants exemption is needed to restore common-sense and remove the shonky operators who have taken up the void. Simple answer - remove all commissions and kick-backs for all, and yes including the wealthy accountants living off it. A simple product disclosure model can apply to an smsf, and true competition will take care of the rest. But don't give any professional body a say in this please!0
- Jahan Hossain I would have to respectfully disagree with you. Those issues you refer to were mainly perpetuated by licenced financial planners. Accountants were the gate keepers trying to keep those recalcitrant planners from the very activity you refer to. Accountants are no longer abler to help those clients from that very activity as it could be a criminal offence. Actually the removal of the accountants exemption has left the planning industry accountable to no one, even accountants are not able to even comment to assist deplorable advice. That very same removal has left Dracula in charge of the blood bank, the converse of what you purport.
0 - In order to provide advice in the SMSF space, professionals need to be appropriately qualified, experienced & look after client's best interest. I am a specialist CA ANZ specialist accountant & auditor with over 15 years of practical experience dealing with thousand of SMSF clients. I must say that I have seen so many shonky advice relating to SMSF establishment which ripped through many retirement nest eggs. I support the current arrangement which makes the professionals accountable for their actions. It should stay and some improvements can be made.0
- I cannot accept that CA and CPA Australia are against bringing back the accountants exemption. They certainly do not have the interests of their members nor the public in mind.0
- I left the CPA years ago when it failed to support its members over the whole nonsense of accountants needing a financial planning licence to advise their clients to bank their tax refunds. Something they had been doing for centuries without needing a licence to do so. Tax refunds being an investable commodity and a "bank" being an investment product. It was stupid back then, and it still is.
Here they are again, not supporting an attempt by members to be able to provide incidental "financial" advice. I notice that the IPA is supportive. No I am not a member of that.0 - NO, we will not shut up Jane, everyone has a right to voice their opinion.
Note to the moderator: immature and childish participants who resort to name calling should be banned from commenting0- Actually, I believe that Jane's name calling was aimed at the CPA and CA. If you take it in that context the second part of her comment makes sense.0
- Oh, I see, that's make perfect sense. Thanks for clarifying!0
- Its not about membership....its about the consumer. If we are talking about setting up advising clients on SMSF then as a financial product a licence is needed. BTW...Limited licencing looks inadequate to me because to advise a client to set up an SMSF you need to consider the clients existing product...which can't be done under a limited licence...sounds like another problem for ASIC!!0
- just another indication of how out of touch the two professional bodies are with the main stream accounting profession0
- Rubbish. How can a tax agent understand tax laws without a law degree?
well Adam, people in the know would say, you don't go to a tax agent or accountant for tax advice. they are good with debits and credits. let's be clear on that.
you get tax advice from a lawyer of course. i would say that wouldn't I. ha0 - CAANZ and CPA are conflicted through expansion of membership to financial "planning" since the 80s. They are now unable to act in the interests of their core membership.0
- Agreed0
