The Institute of Public Accountants’ decision to abandon the Accounting Professional and Ethical Standards Board’s new financial planning standard, APES 230, and formally release an alternative for its 24,000 members has sparked a war of words among Australia’s powerful accounting bodies.
On Monday, IPA released Pronouncement 11: Financial Planning Services, which was immediately criticised by the APESB, CPA Australia and Institute of Chartered Accountants Australia.
The APESB described Pronouncement 11 as a standard of “lesser quality”, while CPA Australia and the ICAA released a joint statement calling the IPA’s actions “disappointing”.
The APESB was a joint initiative of CPA Australia and the Institute of Chartered Accountants Australia, with the IPA joining in 2006. However, IPA reserved its right to review each standard and where required, issue an alternative standard.
IPA opposed APES 230 from the beginning, claiming it was unnecessary given that the federal government’s Future of Financial Advice reforms adequately protected consumers.
In the exposure draft for Pronouncement 11, IPA chief executive Andrew Conway said the group had detected growing anxiety among its membership in relation to the additional requirements of APES 230.
“This anxiety is centred on the fact that many members and practitioners do not believe the additional requirements imposed by APES 230 above those imposed by FoFA will deliver any benefit to clients and will impose an unnecessary additional administrative burden,” he said.
APESB acting chair, Stuart Black, said the board expected IPA to adopt, implement, monitor and enforce all APESB standards among its members including APES 230, which was developed over five years with extensive public and industry consultation and aims to sets the standards for members who provide financial advisory services.
“APESB encouraged the IPA not to issue its alternative standard and has advised that each of the three professional accounting bodies is expected to support all APESB standards to maintain a strong and effective Australian accounting profession if one of the major professional accounting bodies allows its members to opt out of one of APESB’s standards in favour of another standard of lesser quality,” he said.
CPA Australia chief executive Alex Malley urged IPA to fall in line and accept APES 230 which he said was “set by an independent body acting in the public interest”.
ICAA chief executive Lee White reaffirmed the Institute’s commitment to APES 230, promising to guide members with training and other support in the lead up to July 1, 2014, when the standard takes effect.
“APES 230 places consumers’ best interests at the heart of all advice and aims to remove any real or perceived conflicts of interest by implementing a genuine fee-for-service model,” he said.
