CPA Australia Advice managed to offend the majority of financial advisers in Australia, many of whom are also Certified Practising Accountants, before it even opened for business. In mid-2015 the professional body announced that it had effectively been forced to launch a financial planning subsidiary because existing players had done an extremely poor job at delivering quality advice.
Anyone that it didn’t get offside last year must surely be offended by the group’s latest rebuke.
In announcing that CPA Australia Advice had officially been granted an Australian Financial Services Licence (AFSL) and an Australian Credit Licence (ACL) on April 18, CPA Australia chief executive Alex Malley said the group would put “an end to conflicts of interest in financial advice” and set a new benchmark for “professional and ethical conduct”.
“This is our model because our focus is on what is right for the person seeking the advice, not what is financially beneficial for the adviser,” he said.
Investors caught up in the collapse of tax-effective agribusiness schemes recommended by their accountant, or victims of fraud committed by their accountant, would undoubtedly find Malley’s comments amusing.
The fact is there are good people and there are lazy, unscrupulous and unethical people in every profession.
No monopoly on professionalism
CPAs don’t have a monopoly on professionalism and quality advice; just ask one of the thousands of Australians who have a financial planner and say they’re better off because of it.
Independent research from the Financial Planning Association shows that Australians who seek advice feel more secure and positive about the future. Furthermore, a report by KPMG Econtech, commissioned by the Financial Services Council, found people who receive financial advice are around $91,000 better off at retirement than those who don’t.
There’s no question that accounting provides a great launch pad into financial planning but at the same time, it’s a big leap from providing accounting and tax services to providing holistic strategic advice. For starters, financial advisers possess soft skills which allow them to ask, and continue asking, poignant personal questions to uncover what’s really going on in a person’s life and discover their true goals and objectives.
Unless an adviser is able to uncover a client’s true needs and objectives, they can’t develop a comprehensive financial plan that will maximise the chances of the client achieving their goals within an acceptable level of risk.
Soft skills devalued and downplayed
There are accountants who devalue and play down the importance of soft skills in financial planning and they’re likely to be the same people who believe they can “do” financial planning on the side in addition to their primary job of providing tax advice.
The best accountants-turned-advisers will be those who recognise that accountants naturally tend to look at things from a tax perspective and there are many brilliant advisers from whom they can learn.
Ultimately, accountants who plan to move across into financial planning ahead of the removal of the accountants’ exemption on July 1, should understand that financial advice is a separate and discrete profession and it’s very hard to be both an adviser and accountant. Many have tried and failed.
Those who insist on going down that route will need to partner with an experienced licensee with proven advice and client-engagement tools, documents and templates, extensive training and professional-development courses, and the staff and resources available to guide them through the journey and help them grow and develop.
The author is a Fellow of CPA Australia (FCPA).
