The sheer, wasted folly of CPA's financial planning arm 23 July 2018
by Myriam Robin AFR
A farce from start to finish. That's really all that needs to be said about the final, promised closure of CPA Advice, which has since mid-2015 been (rather unsuccessfully) licensing its own financial planners in direct competition with many of CPA's members. On Friday, CPA president and chair Peter Wilson said CPA would shut down the subsidiary this year. For the CPA members whose organisation is footing the bill, it can't come soon enough.
CPA launched CPA Advice amid great fanfare in 2015, with none other than ex-ASIC chairman Greg Medcraft controversially (even back then) doing the honours next to departed chief Alex Malley. In its two full years of operation, according to ASIC documents, the body sucked $6.4 million in employee wages from the parent body, a not-insubstantial amount of which went straight into the pockets of CPA's already-well-remunerated directors. Its revenues? Just $261,000. We shudder to think what its final losses will be once this year's toll is added.
And red ink isn't all CPA's members got. The subsidiary also meant CPAs briefly lost their legal protection from malpractice lawsuits last year, when government regulator the Professional Standards Council refused CPA's application for a new professional standards scheme over concerns about the conflict of interest arising from its financial planning business. Turned out it had warned CPA about this all the way back in 2015, to no avail.
Still, when PwC reviewed the business at CPA's behest earlier this year, asset and wealth management head Anthony James maintained that "on balance the rationale for establishing CPA Australia Advice was valid and remains so", and that CPA should find other ways to provide support to members who want to offer financial product advice. Which doesn't gel easily with his second point, which is that demand from members for the CPA Advice offering was "insufficient to ensure financial viability", leading him to recommend CPA shut down the business.
We, like CPA member Greg Angelo in Monday's letters page, would love to see the financial modelling undertaken by CPA before it established the ill-fated subsidiary. If only to gauge the full scale of the disaster against the hopes for its success.
https://www.afr.com/brand/rear-window/t ... 723-h1317z
|Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594|
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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