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Australian accountants who are financial
planners face a new ethics standard designed to prevent cases of
inappropriate financial advice driven by conflicts of interest.

The draft requirements issued by the
Accounting Professional & Ethical Standards Board (APESB) ban
all remuneration practices based on product sales or the
accumulation of funds under management, including commissions,
percentage-based asset fees and production bonuses.

Under APES 230 Financial Advisory Services,
members of Australia’s three professional accounting bodies who are
financial planners could only charge clients on a legitimate fee
for service basis.

The Australian government recently proposed
laws that would ban percentage-based asset fees when clients use
gearing strategies to invest.

But the APESB has gone a step further by
proposing to prohibit percentage-based asset fees regardless of
gearing.

APES 230 would supersede the existing APS 12
Statement of Financial Advisory Standards.

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By GlobalData

Comments on the exposure draft are due by 15
September and the final standard is expected to be effective from 1
July 2011.

CPA Australia has said it supports the
intent and principles of APES 230, but is concerned about the 1
July start date.

“We understand the potential impact the
proposed standard will have on members and during the drafting
process of APES 230 consistently highlighted the need for
appropriate transition provisions and a considered start date,” CPA
Australia said in a statement.

“We are disappointed that this has failed to
be reflected in the released [exposure draft].