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Critical consumer protections at risk due to poorly planned Government move

Publication date: 06 Aug 14 | Source: THE TAX INSTITUTE

6 August 2014: A Federal Government move to allow financial planners to provide tax advice fails to set appropriate tax and commercial law education requirements and threatens critical consumer protections, according to The Tax Institute.

Michael Flynn, President of The Tax Institute, said, “We are concerned that recent Government Regulations will allow relatively inexperienced financial advisers to gain registration under the Tax Agent Services regime by simply joining a recognised financial adviser professional association.  

“The Government’s actions result in there being no requirement for financial advisers to have completed a course in tax or commercial law, and yet the effect of this will be to allow them to provide wide-ranging tax advice. 

“This means that consumers will be at risk of receiving tax advice and services provided by inadequately qualified advisers or those with out-of-date skills,” he said.

According to Michael Flynn, the Government’s move is surprising given the recent Senate Economics References Committee’s investigation of a number of rogue financial advisers.

The report found the activities of some advisers were ‘unethical, dishonest, well below professional standards and a grievous breach of their duties’.

Mr Flynn said, “Given that the report recommended imposing minimum education, experience and continuing professional development requirements on the financial advising industry at large, it is illogical that the Government is withdrawing some of these conditions for the provision of tax advice.

“The law must ensure robust consumer protection. Recent financial planning scandals such as Storm Financial and Opes Prime, have highlighted the risk posed to people’s life savings, their investments and indeed their livelihoods, as a result of poor consumer protection.

“In effect, the Government’s Regulations fail to meet the minimum educational standards consumers are entitled to expect,” said Mr Flynn.

ENDS

The Tax Institute is the country’s leading educator and professional association in tax. Its 15,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.  The Tax Institute supports the tax profession through education and professional development and works to continually improve tax law and its administration.

Contact:   Robert Jeremenko, Senior Tax Counsel, The Tax Institute, 0468 987 300