Setting Better Standards

President Trump resets standards tweet by tweet.

Telling four Democratic congresswomen to ‘go back’ to where they came sets new expectations of how the world’s most powerful office deals with a contrary opinion.

Last week, new standards of governance were recommended by a critical capability review into the Australian Prudential Review Authority (APRA). The report found the relationships between APRA and those they review were too ‘clubby’ with less regard of the best interests of with their retirement savings in superannuation.

Raw standards of behaviour were also highlighted on Channel Ten’s “The Final Quarter” – depicting a sad end to the great career by Sydney footballer Adam Goodes – in retrospect; even the protagonists admitted higher standards should have been shown.

Standards are like foundations; fundamental and rarely noticed unless they are missing. The Hayne Royal Commission found some standards missing from financial services last year.

One, in particular, was APES230.



Back in 2012, the Accounting Professional Ethical Standards Board (APESB) proposed a new standard for Australian accountants delivering financial advice. Originally conceived and drafted in anxious GFC era of 2008 (APS12), championed by dauntless professionals like Robert MC Brown, APES230 proposed the removal any product-based remuneration or incentive from the advice given by an accountant practising in Australia.

That is, no accountant providing financial planning would be able to accept a fee from a client that was charged based upon a client’s funds under management or a commission paid from a client’s purchase of a financial product.

APESB conducted studies and interviews; reports were presented, opinions were sought, and the standard was ratified coming into force 1 July 2013 with a transition period until 2018.

It didn’t last for three months.

It was watered down from the original intent making adherence voluntary.



Mostly by the banks, insurance companies, product dealer groups working with accountants (i.e. Professional Investment Services, Count Financial and others).

If Australian accountants were forced to reject financial product incentives, it would probably become a standard for other financial planning professionals who were remunerated via product incentives causing significant upheaval for those financial groups, the valuations of their businesses and their business models.

Also, they argued, financial advice would only become affordable for the high-net-worth putting advice out of reach of most Australians unable to afford the advice fees. Interestingly, an association of accountants main concern was the disadvantage accountants would have by making their fees more transparent when compared to non-accountant planners.

These arguments run as strongly today as they did when the 2012 APESB decision to ratify the standard.

Despite the arguments, the APESB believed Australia’s accountants would thrive without dependency on product incentives by focusing and pricing their professional services as they always have, on the value provided not the products sold.

Unfortunately, the powers at the time ensured the APESB’s proposed standard was never tested.

Those board members must feel some irony reading current headlines.



Today most of the financial advice and bank-aligned planning groups that opposed APES230, no longer exist in their former glory.

The report at the heart of last year’s Hayne Royal Commission that provided much of the ammunition – ASIC Report 499 “Fee for No Service” – has created a remediation debt in the billions, has been the catalyst for a collapse in the valuations of many financial planning practices, and has accelerated the exodus of many financial advisers from the industry.

Would the standards the APESB proposed had an impact on any of this?

Still today, research suggests little has changed in Australians willingness to pay for valuable financial advice. Unless advisory firms are targeting the high-net-worth market, or clients have specific investment needs or have self-managed superannuation funds or special aged care needs, it will be too hard for most advisory firms to make a buck.

Witnessing the growth of Scott Pape’s services, of the subsidised advisory forces within the superannuation giants, and of vast choices of advice apps for our smartphones, one might conclude the APES230 standard wasn’t worth fighting over.


There’s another important feature of standards.

They draw lines in the sand.

When Trump tweeted his racist outcry about the four congresswomen, the voices of many who have experienced racism rallied to be heard.

APES230 might be a shadow of its original intent.

These are the best of times for the growing number of accountants and advisers who align with APES230’s original standards, who deliver valuable, comprehensive advice and are tired of association with conflicted practices and parties and the deceit and antics of past ‘industry leaders’.

I reckon the APESB of 2012 were ahead of their time.

Last month we were granted our own standard of professional advice by ACCC/IP Australia.

We were issued with the first recognised Certification Mark issued via ACCC/IP Australia in Classes 35 and 36, that is for provision of financial advice – it’s the baby of APES230 – it’s called Certainty Advice.


Because we don’t want to be like Adam Goodes fellow players who now say, they should’ve done more at the time to uphold standards.

What do you reckon?



About Jim Stackpool

For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.

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