Authorised representatives of CPA Australia’s new financial planning business will pay up to $21,120 a year in licensee fees, depending on the level of authorisation they choose.
CPA Australia Advice (CPAAA) will offer three levels of service for ARs under its Australian financial services licence, when it is issued. It has also applied for an Australian credit licence.
The professional association that represents more than 150,000 accountants has revealed its licensing price structure during a series of information sessions staged around the country ahead of the advice business launch. CPAAA aims to be operational by July 1 this year.
The chief executive of CPA Australia, Alex Malley, will lead the new venture, and Seona Murphy, a former national practice manager for industry fund HOSTPLUS and managing director of Advice Services Australia, has been appointed as head of advice. Adam Awty and Jeff Hughes will act as chief operating officers of both companies, and Craig Lake has been appointed head of operations. Lake has three decades of experience in financial services, planning and advice roles in organisations including Crowe Horwath and Norwich Union Australia.
“We have decided on a wholly-owned subsidiary for one simple reason – consistency of culture,” Malley says.
“We see it as critical that our new company has the same culture and professional standards that are the cornerstones of CPA Australia.”
CPAAA’s three licensing options range from “basic” at $695 a month to “comprehensive”, at $1760 a month. It will cost an additional $695 a month to operate under CPAAA’s credit licence. (See box, below.) It has also outlined the features and support offered for each licencing level.
CPA Australia’s advice business has been launched in response to what the association perceives as a lack of public trust in the financial planning profession in the wake of advice scandals, notably that engulfing the Commonwealth Bank.
It says its advice business will “operate in compliance with the independence provisions of s. 923A of the Corporations Act 2001 … and be consistent with APES 230 Financial Planning Services, the professional standard for members engaged in the provision of quality and ethical financial services”.
Complying with s. 923A will enable CPAAA’s authorised representatives to legally describe themselves as “independent”, “impartial” and “unbiased”. The Corporations Act explicitly outlaws the use of such terms where advisers receive commissions (apart from commissions that are rebated in full to clients), remuneration calculated on the basis of the volume of business placed an issuer of a financial product, and “other gifts or benefits” from product issuers that might be expected to influence advice.
Professional Planner understands that advisers operating under the CPAAA licence will also be prevented from charging asset-based fees.
In an information sheet produced for members, the CPAAA says “an ethos of integrity and transparency” is built into its charter, and that it is committed to “the client’s best interests – no commissions, no hidden incentives, just pure and transparent fee-for-service”.
Level 1: Basic authority
Cost per month (excluding GST): $695
If you are looking for an answer to the removal of the accountants’ exemption, then this authorisation is your solution. This enables broad self-managed super fund advice, including contributions and pension advice. It also means that you can provide general advice to your clients about risk insurance, which is essential for self-managed super fund and business clients.
Level 2: Strategic authority
Cost per month (excluding GST): $1260
If you are looking to build financial advice into your public practice offer, but want to focus on strategic advice rather than products, then this authorisation will best suit your needs. This allows you to provide the same advice as the Level 1 Adviser, plus strategic superannuation, investment and risk advice (excluding specific product recommendations).
Level 3: Comprehensive authority
Cost per month (excluding GST): $1760
If you need a comprehensive advice solution, this authorisation is your answer. It enables you to provide both strategic and product advice to your clients.
Cost per month (excluding GST): $695
If you want to provide consumer credit advice and services, you have the option to be solely authorised as a credit representative. You also have the option of being a credit representative in addition to a Level 1, 2 or 3 authority.
Source: CPA Australia Advice