Accountants lay claim to insolvency advice regime
The accounting industry has sought to establish primacy in the insolvency advice arena, with key organisations telling a Parliamentary inquiry that accountants are most appropriately qualified to help businesses which are in trouble.
In a submission to the Senate Economics Committee inquiry into amendments to Australia’s insolvency laws, Chartered Accountants Australia and New Zealand pointed to the need for advisers to be “appropriately qualified” and the fact that concern had been expressed about people purporting to offer advice but not acting in the best interests of the company.
Pointing to the requirements necessary to be a member of Chartered Accountants ANZ, including educational requirements, adherence to an ethical code and the holding of appropriate Professional Indemnity insurance, the organisation claimed this would lead to better outcomes.
“Advice sought from a chartered accountant with relevant skills, or a professional with similar obligations and requirements, will mitigate concern that the overriding objective of a better outcome for the company is met,” the submission said.
“If a company is failing and there are not viable options to save the underlying business, an appropriately qualified adviser will identify this. For a member of a professional body this is a clear obligation and there are defined consequences for not complying,” it said.
“In our submission to the consultation, we recommended development of regulatory material covering what would constitute “appropriate” in this regard. We noted that pertinent factors would be membership of a professional body which requires the member to follow professional codes of ethics and hold PI insurance, and which has an active monitoring and disciplinary process.”
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
