Accountants take tough soft dollar stance

Accountants are set to take the moral high ground over advisers on soft dollar remuneration after developing a new code of conduct that takes a much tougher stance than the one endorsed by the Financial Planning Association (FPA).

The Institute of Chartered Accountants in Australia and CPA Australia are considering a code that would require their members who are involved in financial planning to disclose any soft dollar payments they receive that are worth over $100.

The FPA endorsed code, introduced in collaboration with the Investment and Financial Services Association (IFSA), requires soft dollar payments to be disclosed only if they are worth over $300.

The accountants’ plan was hatched at a meeting of the ICAA’s National Financial Planning Committee last weekend. It will now be put to members of both the ICAA and CPA Australia for approval.

While the accounting groups did not comment on the plans last week, they drew a mixed response from the financial planning industry.

FPA board member Sarah Brennan, who was the architect behind the association’s code, denied the accountants’ move had the potential to embarrass planners.

She said the FPA had developed its code on the basis of the requirements on Federal politicians, who have to disclose any gifts they receive that are worth over $300.

“The question of what figure you choose goes back to the issue of materiality. As an industry, we looked for a precedent and the parliamentarians’ one seemed sound,” she said.

IFSA chief executive Richard Gilbert, who was also instrumental in the development of the FPA code, said the accounting groups may create a rod for their own back with the $100 threshold for disclosure.

“It [the $300 figure] was a matter of the ease of administration as well as materiality,” he said.

“We just think you have to be careful of the extent of the regulatory and compliance burden,” he said.