Count has vowed to implement the Accounting Professional and Ethical Standards Board’s APES 230 financial planning services standard by July 1, 2014, as the major accounting bodies continue to fight over the standard’s relevance.
The Commonwealth Bank-owned dealer group, which has over 600 authorised representatives, is “progressively implementing” APES 230 across its network of over 300 practices, Count chief executive David Lane told Professional Planner.
“This standard will be a significant change for many accountants and advisers, especially the fee disclosure and positive consent requirements. Clients will need to demonstrate they understand, and agree to, any commission payment and asset-based fees. It’s an extra piece of paper and a different process,” he said.
Originally, APES 230 proposed to ban all superannuation, investment and insurance commissions and asset-based fees. However, after five years of public and industry consultation, the APESB agreed accountants who also provide financial planning services could charge asset-based fees and collect commissions by third parties provided they obtained prior written, informed consent from clients and provided an annual disclosure statement to the client of the estimated amount to be received.
Advisers will also need to provide three comparative quotes, where possible, on new life and risk insurance policies and new loans.
Where applicable, members must also disclose to the client the impact of any proposed changes to existing insurance contracts and loans.
Land said he agreed with the APESB’s decision to back down from the proposed ban on asset-based fees.
“We have been on the record saying that FoFA was a well constructed plan with plenty of industry consultation. We disagreed with making it more onerous for accountants to provide advice given that one of the goals of FoFA was to make advice assessable and affordable for more Australians,” he said.
On Monday, the Institute of Public Accountants angered the APESB, CPA Australia and the Institute of Chartered Accountants when it formally released Pronouncement 11: Financial Planning Services as an alternative to APES for its 24,000 members.
