Financial Advisory Services: APES 230 and FOFA update

Key Points

• The Institute continues to engage with the Accounting Professional & Ethical Standards Board on Exposure Draft APES 230 Financial Advisory Services
• The Institute is undertaking state-based member information sessions on progress with Treasury and ASIC on the government’s Future of Financial Advice (FOFA) reforms
• Treasury will hold a second round of public information sessions about FOFA in February and March this year.

Last week, the Accounting Professional & Ethical Standards Board (APESB) discussed its approach to the ongoing development of APES 230 Financial Advisory Services, in light of the Exposure Draft released last year and the receipt of numerous submissions.

The board noted the progress of the government’s Future of Financial Advice (FOFA) reforms, and discussed and approved the proposed Stakeholder Engagement Plan on APES 230.

In December 2010, the APESB announced its intention to extend the consultation on Exposure Draft APES 230 Financial Advisory Services following the receipt of a record 66 submissions from stakeholders. The board also deferred the start date of the proposed standard, initially planned for 1 July 2011.

The Institute, along with the other professional accounting bodies, will further engage with the APESB as part of its ongoing consultation.

FOFA update

The Institute has also resumed talks with Treasury and ASIC on the FoFA reforms. The Institute’s Head of Financial Planning, Hugh Elvy, has re-commenced state-based member information sessions on our progress, with meetings in Victoria and Tasmania held earlier this week.

In February and March this year, Treasury will hold a second round of public information sessions nationally. The sessions are designed to provide an update on the outcomes of the consultation process undertaken in the second half of 2010. Members are invited to attend these sessions and can register through the FOFA website.

Treasury's focus is now shifting towards drafting the legislation for a couple of the key reforms – fiduciary duty, ‘opt-in’ and volume rebates. Treasury anticipates there will be a public exposure of draft legislation and/or regulation in mid-2011, with further consultation on that draft legislation and/or regulation once it is public. 

Treasury has released a consultation paper reviewing the definition of retail and wholesale investors. The Institute will be developing a submission jointly with the other professional accounting bodies and as always, members are encouraged to provide comment for consideration in the submission.

Following further discussions with Treasury, representatives of the professional accounting bodies took the next step and met with ASIC to discuss in more detail the role of professional accountants providing financial advisory services, and to outline opportunities in the proposal to replace the current ‘accountants’ exemption’. Feedback on this meeting is expected this week.

Article last updated 9 February 2011