As per the recommendations of former auditor-general Ian McPhee’s review, the new chair of CPA Australia Advice, Suzanne Haddan, will oversee a post-implementation evaluation of the licensing arm which has lost $7.4 million since establishment in 2015.
Ms Haddan will be joined by Hong Kong-based Arun Nangia, who joins the board of CPA Australia Advice this week. An additional director is under consideration for 2018, when the entirely new CPA Australia board comes into effect.
Mr McPhee’s recommendations included establishing a “skills matrix” to ensure directors of CPA Australia Advice can effectively oversee the running of a dealer group. To date, and contrary to how Australian dealer groups are typically run, the operations of CPA Australia Advice have been largely overseen by existing directors of CPA Australia.
CPA Australia Advice has struggled from the start. It was granted an Australian Financial Services Licence (AFSL) and Australian Credit Licence (ACL) less than three months out from the expiration of the accountants’ exemption, which was a key motivator for accountants to get authorised under an AFSL.
Aside from its huge losses, it has also only onboarded 27 authorised representatives as of last month, which is well short of the business case estimates of 250 by this year. If its current pace of growth continues, there is little to no chance of reaching a target of 1,360 authorised representatives by 2019.
However, Accountants Daily understands from several accountants and training providers that authorised representatives of CPA’s licence are happy with the service they’re receiving, at a time when many accountants are considering a switch from their original licence of choice.
According to a communication to members, sent Friday afternoon, there is "strong demand" to fill the shoes of previous chief executive Alex Malley, who was sacked by the CPA Australia board in June this year.
New chair Peter Wilson said that members continue to be particularly frustrated by the contract terms and remuneration of Mr Malley, and that this will be taken into account when the next chief executive is hired in 2018.
“What we can change is the contract for the next CEO. The board supports the independent review’s recommendation that CEO notice periods should be conservative and remuneration should be independently benchmarked against similar member-based organisations. The board will ensure this is reflected in contract negotiations in our recruitment for a new CEO,” Mr Wilson said.