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APES 230

Welcome news for Accountants on APES 230

Glenn Fairbairn
Director/Private Client Adviser
5 Apr 2013

In June 2010, the Accounting Professional and Ethical Standards Board released Exposure Draft APES 230 Financial Advisory Services (APES 230) which sought to remove all percentage-based remuneration for financial advisers, including asset fees, production or volume bonuses and other commissions. 

The objective was to prevent all potential conflicts of interest by requiring advisers to adopt flat or fixed price fees for financial advice.

APES 230 was released two months after the Ripoll review which recommended a suite of reforms to the Federal Government.  The major difference between both was that Ripoll allowed asset based fees on ungeared investments.

If adopted, APES 230 would have applied to members of the IPA, CPA Australia and Institute of Chartered Accountants in Australia who provide financial planning services. Many accountants believed these changes, which went substantially further than the Future of Financial Advice reform (FoFA) requirements, would have placed them at a commercial disadvantage in the financial planning space.

Major lobbying by the top tier accounting groups appears to have paid dividends on APES 230, with the Accounting Professional and Ethical Standards Board’s (APESB’s) latest board papers revealing significant concessions on key elements, such as asset-based fees. 

While we have been strong advocates for the banning of soft dollar benefits and third party payments, we would welcome any decision by APES which provides its members with the option to charge asset based fees. In our view this offers consumers with a greater array of choice in how they prefer to pay for advice.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.