Over the past decade we have witnessed too many Australian consumers suffer as a result of poor financial advice; and in more recent times we have seen too many media reports about the failings of large financial planning institutions.
CPA Australia’s commentaries and actions on these key issues of public policy have always been underpinned by a commitment to the public interest; and consistent with this approach, our board has determined that we are going to enter the financial advice market in Australia.
Throughout our history we have had a track record of acting without fear or favour, and this move is no different – it is all about making a major contribution in the public interest to rebuilding community confidence in financial planning.
We have established CPA Australia Advice Pty Ltd, a wholly-owned subsidiary of CPA Australia. Why? To embed in the new entity the same strong culture of professional and ethical conduct that already exists at CPA Australia.
Our culture is about independence, transparency, integrity, compliance and continuous learning. It also includes our fundamental objective to act in the public interest. We see it as critical that our new company has the same culture and professional standards that are the widely acknowledged cornerstones of CPA Australia.
Independence and transparency – key words that have been missing in the sector for far too long. Yet they are fundamental in the eyes of those who seek financial advice, but remain wary of the conflicts of interest evidenced by the many high-profile cases of poor advice consistently coming to light in the media.
It is our strong belief that we can no longer sit on the sidelines watching and talking about the problems that continue to arise in the financial services sector without stepping up and making a contribution.
A game changer
CPA Australia Advice will be a game changer for financial advice and represents a major step forward in rebuilding trust in the financial advice market in Australia.
Our new company’s commitment will always be to act in the client’s best interests. Our focus will be on what is right for the client, not for the adviser. This means a strong focus on advice and no commissions, no hidden incentives, no asset-based fees – just pure and transparent fee-for-service advice.
CPA Australia Advice’s operations will be consistent with section 923A of the Corporations Act 2001, which allows the use of terms such as “independent”, “impartial” and “unbiased”. The company will also be consistent with APES 230 – Financial Planning Services, the professional standard for our members who are engaged in the provision of quality and ethical financial planning services.
Our new company will be applying for an Australian financial services licence (AFSL) and an Australian credit licence and, subject to the approval process, we intend having CPA Australia Advice operational in 2016. This will be a fitting achievement for CPA Australia’s 130th year.
While our move into this sector is driven by our commitment to the public interest, CPA Australia Advice will also provide our members who are in public practice with a new independent pathway into this sector, by authorising them to provide financial planning advice to their clients within their own public practice.
Strong education and professional backgrounds
Licensing members – and future members of CPA Australia – by providing pathways to encourage eligible new entrants also ensures all advisers under CPA Australia Advice have the same strong education and professional backgrounds, fundamental to providing quality advice.
Looking ahead, I can see a time when all young people who are about to enter the market see this as the beacon for the right way to go about financial advice and I hope that we can create a sustainable new generation that sees independence as their core credibility.
The establishment of CPA Australia Advice does not mean we will stop supporting our members who are already in this sector or intending to enter through applying for their own limited AFS licence. In fact, it will enable us to strengthen our commitment, as it will provide us with opportunities to provide new levels of support and resources.
We are well aware that we are entering a market that is dominated by the big financial institutions. It is a significant investment and we have a lot of hard work ahead of us, but we’re here for the long haul and we strongly believe in the value of quality financial advice. We also believe that Australian consumers seeking financial advice deserve a fully transparent and independent alternative.
This initiative will allow CPA Australia to make a major and lasting contribution – without fear or favour, and in the public interest – to rebuilding the community’s trust and confidence in financial planning.
