APES 230 to be implemented with modifications
The Accounting Professional and Ethical Standards Board (APESB) has committed to the introduction of the controversial APES 230 effective from 1 July, next year, and subject to transitional provisions covering commissions.
The APESB announced on Friday that its board had agreed in principle that APES 230 should be "issued without delay".
However the board clarified an element of grandfathering, when it said that the new standard would allow members to accept trailing commissions for Financial Planning Services entered into prior to 1 July 2013 in respect of life insurance, other risk contracts and the procurement of loans, as long as the member does not subsequently provide further services in respect of those contracts or loans.
As well, the standard will allow the provision of professional development for members from third parties, provided such activities are Future of Financial Advice (FOFA) compliant.
The board's decision follows much debate within the accounting and financial planning communities, and warnings that implementation of the standard would see an exodus of members from the major accounting organisations.
The transitional provisions outlined by the board are as follows:
- Commissions for financial planning services which are entered into prior to 1 July 2013 in respect of life insurance, other risk contracts and the procurement of loans can only be accepted by members until 30 June 2018, where the member provides additional services in respect of those contracts or loans;
- Commissions for financial planning services which are entered into between 1 July 2013 and 30 June 2015 in respect of life insurance, other risk contracts and the procurement of loans can only be accepted by members up until 30 June 2018, and only if the member receives specific disclosures and informed consent from clients.
- Financial planning services which are entered into from 1 July 2015 will be required to allow fee-for-service principles as described in the July 2012 Exposure Draft.
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