Accountants will be allowed to accept commissions, but only with “informed consent” from clients, the Accounting Professional and Ethical Standards Board (APESB) has ruled.

They should switch to a fee-for-service model when giving advice, the final version of the APES 230 standard on financial planning says.

The issue of commission payments was the most contentious, according to APESB Chairman Kate Spargo.

The new standard is aimed at “eliminating or reducing to an acceptable level the threats created by the conflicted remuneration methods of asset-based fees and third-party payments”, she says. 

“The board strongly recommends to professional accountants that clients be charged on a fee-for-service basis for financial planning services, to minimise the opportunity for conflicts of interest.”

Informed consent is an established legal principle requiring a high standard of disclosure, Ms Spargo says.

Clients must have “a clear appreciation and understanding of the relevant facts in relation to the charging for services, as well as the implications of what the client is agreeing to. The accountant must also form a view about the level of understanding of his or her client.”

Other requirements for accountants include annual disclosure to clients on the actual and estimated amount of fees and comparative quotes in the case of insurance.

Most of APES 230 takes effect on July 1 next year; the remuneration requirements will begin a year later.