Current CPA Advice authorised representatives are able to give financial advice until the end of a 90-day notice period. Beyond that time, they will need to find another licensee to continue with those advice services.
Further, to be eligible for the transitional arrangements before the federal government’s mandatory education requirement kicks in, accountants providing advice need to be authorised under an AFSL before January next year. This includes accountants operating under a limited AFSL.
In short, CPA Advice’s authorised representatives have about five months to select and be accepted by a new dealer group.
Becoming an authorised representative is not as arduous as becoming self-licensed, but affected accountants are being advised to act quickly.
“I understand most of them are fully authorised, so they have more options than those accountants with only a limited authorisation,” chief executive of Licensing for Accountants Kath Bowler told Accountants Daily.
A spokesperson for CPA Australia said the association will be working with each authorised representative during the shutdown period, which may involve introducing an alternative licensee.
Further, CPA Advice will cover the ASIC adviser levy, and authorised representatives will not be paying authorisation fees from now until they are transitioned to another AFSL, the spokesperson told Accountants Daily.
CPA Australia has yet to confirm when it will hand back its licence to ASIC, which is a regular step in a voluntary closure of a licence. Accountants Daily understands ASIC did not prompt the closure of CPA Advice, and was not investigating compliance concerns as it was with Dover, which announced its closure last month.
“Usually it takes time to hand back a licence, which is what I assume CPA Advice is going to be do. The cancellation will be effective from whatever date ASIC agrees. I assume the licence will therefore be handed back towards the end of the year, consistent with the announcement to have it shut down by the end of the calendar year,” solicitor at The Fold Legal Jaime Lumsden Kelly told Accountants Daily.
“However, it could happen faster – Dover’s licence was handed back within a month, but given this is a voluntary shut down, I’d be surprised if it wasn’t done in an orderly manner,” she said.
Just in time
An announcement yesterday from the Financial Adviser Standards and Ethics Authority (FASEA), the body setting the federal government’s education requirements, reiterates the regulatory conflicts CPA Advice created for CPA Australia members.
FASEA released details of its proposed ‘professional year,’ which all new entrants to financial advice must complete before providing financial advice on their own.
Part of the requirements include information about the training process being made available to a code monitoring body, which CPA Australia was looking unlikely to qualify because of its affiliation with CPA Advice.
In effect, CPAs looking to provide advice wouldn’t have been able to use CPA Australia as their code monitoring body.
Accountants Daily raised this conflict with CPA Australia in March, and was told the board was working on a fix for its members.