The accounting body, which has more than 150,000 members across 120 countries, will be applying for an Australian Financial Services Licence (AFSL) and an Australian Credit Licence (ACL) to operate as a financial services business.
The new company, to be called CPA Australia Advice, will be a wholly-owned subsidiary of CPA Australia and promises “no commissions, no hidden incentives, no asset based fees – just pure and transparent fee-for-service.”
CPA Australia chief executive Alex Malley, who will also head the new subsidiary, said the company would set a new benchmark for professional and ethical conduct in making independent financial advice available to all Australian consumers.
“CPA Australia Advice represents a game changer for financial advice in this country.
“Our focus will be on what is right for the person seeking the advice – not what is financially beneficial for the advisor.” Malley said in a statement.
CPA Australia, where the CPA stands for Certified Practising Accountants, provides its members with an internationally recognised qualification as well as the opportunity to complete specialist training and continuing professional development.
It is one of three major professional accounting bodies in Australia. The others being the Institute of Chartered Accountants in Australia and the Institute of Public Accountants.
ASIC on hand
Greg Medcraft, chairman of the domestic financial services regulator, the Australian Securities and Investments Commission (ASIC), signalled his support for the new advisory business by attending the formal announcement of the company.
ASIC has been cracking down on financial planning and advisory business after a scandal at the Commonwealth Bank of Australia involving wrong or misleading financial advice.
In October last year ASIC set up a specialist Wealth Management Project to focus on the largest advice entities – the four major Australian domestic banks, Macquarie Bank and AMP.
In recent years, the regulator has also taken a lot of enforcement action against both financial advice firms and individual advisers.
Since 2010 it has removed 69 advisers from the industry temporarily or permanently; secured 19 criminal outcomes; had 23 licences cancelled, and entered into over 25 enforceable undertakings.
