Regional Insights

REGULATORY BURDEN: THE IMPACT OF REGULATORY COMPLEXITY

The complex nature of Australia’s regulatory environment is placing an excessive burden on public practitioners and their clients – and a landmark study from CPA Australia shows that those in regional areas risk being hit the hardest.

CPA Australia’s Regulatory Burden Report reveals that almost 67% of regional public practitioners feel that resources spent on compliance today are higher than three years ago, compared to 55.6% of those in metropolitan areas.

The report also shows that the appetite for advice is greater in the regions than in metropolitan centres. More than 34% of regional SMEs would like their accountants to provide financial planning advice, compared to 24.1% of SMES in cities. This is also the case for almost 42% of regional consumers, compared to 37.3% in cities.

Regional Insights

CPA Australia believes the accounting profession should to be able to provide more affordable, independent, quality advice – not less.

However, its research shows that almost 10 per cent of consumers and 28.6 per cent of SMEs across the country have not been able to get the advice they need because their accountant did not hold the necessary licences or registrations.

They have made it difficult to offer any advice at a strategy level. The costs definitely will impact our provision of services, and I see no choice but to pass on the additional costs to our clients. They will have the opportunity to re-evaluate what level of service they require.    FCPA, Illawarra

CPA Australia CEO Andrew Hunter says that while regulations are essential, the current burden is simply too great.

It is also pushing for the introduction of individual licensing or registration of financial advisers – something that almost 60 per cent of members support.

“We need to identify how we can reduce legislative complexity to remove inefficiencies and associated costs, while providing real and effective consumer protections that encourage the broader community to seek advice,” he says.

To reduce the advice gap, CPA Australia is advocating for a review of the definition of key terms, such as ‘general advice’ and ‘financial product’ advice.

To address duplication and excessive CPD obligations, it is calling for an alignment of codes of ethics and CPD requirements.

“The cost of compliance is becoming far too great and the public is at risk of missing out on valuable advisory services – especially in the regions,” Waller says. “There is a significant gap between policy intent and what is happening at the coalface of public practice, and it needs to be addressed.”

It has become impossible to sensibly advise clients on matters that they consider we should help them with,” he says. “We’re not talking about hard-core ‘product advice’, but matters in respect to their financial dealings, thoughts and actions. These are matters that have been discussed by accountants for generations.    CPA, Geelong