CPA Australia has taken a conciliatory tone in what some believe is a looming battle between accountants and financial planners as both professions seek advantage from the Future of Financial Advice (FoFA) reforms.
Alex Malley, chief executive of CPA Australia, believes the vast majority of accountants has no interest in providing product advice and only wishes to establish professional referral networks.
Speaking at an event in Sydney last week, Malley said suggestions of a turf war between financial planners and accountants as a result of the FoFA reforms are “misguided and inaccurate”.
“Some people in the industry have painted this as a future accountants-versus-financial-planners showdown,” he said.
“We don’t see that at all. The vast majority of our members do not wish to provide product advice and want to establish professional referral networks to other ‘trusted advisers’”.
Softening position
This represents a softening of the professional accountancy body’s position, with Malley (right) stating in late June that for many Australians, their professional accountant is their only source of trusted financial advice.
“This final element of the FoFA reforms reflects the prominent role professional accountants play in the provision of financial advice and will go a long way towards achieving the objectives of broadening access to financial advice across the community,” he said on the introduction of the new conditional licensing regime for professional accountants.
However, collaboration rather than competition appears to have won the day, with Malley recognising that business relationships formed between accountants and advisers will play an important role in servicing clients who are increasingly more financially literate or in need of a specific product recommendation.
Under FoFA, accountants will be able to provide limited financial advice and Malley acknowledged that there had been some jostling for the advice space from a number of different sectors.
“There is no point in building relations at the eleventh hour when governments are talking about policies, often on the run,” he said.
“If we have an agreement to disagree on some fronts, but overridingly a healthy respect for collaboration, we have a much better chance of being strategic as a sector.”
According to Malley, it is important for accountants and advisers to focus on opportunities and drivers to collaborate more often with “small territorial issues” likely to be resolved by market forces.
Advice is predominantly a relationship exercise; nothing new here.
However, Malley appears to be asking for a honeymoon, with no pre-nup, somewhere between adviser and CPA. But there is no sweet spot for the client relationship without also bearing the responsibility currently held by advisers.
What market disturbances (FoFA, SMSF, product innovation, etc) offer to CPAs is an opportunity to transform their business and personal skills to those which more suit the advice relationship environment, as opposed to their usual accounting environment.
What benefit does Malley’s proposed “collaboration” model offer to an adviser? They’re 30 years married, *with* the pre-nup!
“product advice”? WTF!!!
Product advice is a very very small part of financial planning.
I have not read so much rubbish. There is in fact no limited financial advice that an Accountant may apply for. The only thing that is different at this stage is the application form an accountant will not require to be audited by a registered company auditor. The Accounting bodies have at this stage not achieved very much and have left all matters for their financial planning sections to negotiate with the Government.
Not a very good show at this stage and matters must be changed with the Government.
It may well be better to revisit the original Accountants exemption and find a way for it to work