Keddie Waller
Australians’ access to quality and affordable financial advice is under threat as the accounting profession feels the squeeze from regulatory burden, according to a report from CPA Australia.
The pressure on accountants to have multiple licences and fulfil countless hours in education is pushing costs to clients up and driving accountants out of the profession.
The Regulatory Burden Report, conducted by Core Data, shows of the one in four accountants who offer financial planning advice, more than a third (34.6%) are considering reducing the variety of services they offer, and a further 12.5 per cent are considering ceasing to offer financial planning advice due to regulatory burden.
CPA Australia is calling on the Government to streamline the existing regulatory framework to create clearer and appropriate regulation. Recommendations outlined in the report include the introduction of strategic financial planning advice as separate to product advice in order to tackle the growing advice gap. The Report also identifies consolidating Continuing Professional Development (CPD) requirements as a means to eliminate overlapping training requirements.
At present, 79 per cent of accounting firms spend more time each week attending to compliance than they did five years ago and 61 per cent spend more time than they did just a year ago.
Keddie Waller, Head of Public Practice at CPA Australia said, “Australians’ demand for financial planning services is strong but the number of financial advisers available to meet demand is declining due to pressure on accountants from excessive regulation.
“Regulation of the financial services industry plays an important role in protecting consumers, however we need to ensure all pieces of regulation are necessary and effective in servicing the public without hindering affordable access.
“The accounting profession and the public seeking access to accountants are facing a real crisis. As accountants depart the industry, they are not being replaced by new entrants at the same rate, and it leaves less advisers with experience to mentor new entrants requiring supervised experience as part of their qualifications.
According to the Regulatory Burden Report, accountants are trusted and preferred for financial advice if they have the necessary licences or registrations, however tax agents are frustrated by the limited scope with which they are allowed to operate and feel their client relationships are being tested when they are unable to advise on a simple financial matter.
Waller added, “This is being felt by consumers, with more than half of respondents saying they would not see a specialist if they had unmet personal advice needs because they do not want to incur additional costs. Over a third said they would do further research themselves if their accountant could not service their needs.”