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Financial planner options paper points way to better consumer protection

Publication date: 29 Nov 10 | Source: THE TAX INSTITUTE

The Federal Government has an opportunity to close a loophole and ramp up consumer protection with today's release of a paper on Regulation of Tax Agent Services Provided by Financial Planners.

The paper provides two options for extending regulation of financial planners giving tax advice. One involves rolling financial planners into the Tax Agent Services Regime; the other investigating and implementing what changes, if any, might be made to the Financial Services Licence system.

Most tax professionals are already covered by the Tax Agent Services Act, a sweeping series of reforms in March this year that raised the bar and introduced national consistency into standards, ethics and penalties for professionals providing taxation advice.

Financial planners, however, were granted a 15-month exemption, with responsibility for their regulation remaining with ASIC and the system of Australian Financial Services Licenses. 

"Today's paper confirms that doing nothing is not an option", Taxation Institute Senior Tax Counsel, Robert Jeremenko, said.

"People relying on tax advice should expect that their adviser meets the highest standards as the Tax Agent Services Regime offers, and that they are also covered by the sorts of protective measures it offers.

"The Government has asked for comments on the discussion paper by 25 December - all that consumers want for Christmas is certainty and protection from misguided and misleading tax advice.

"The need for change to the way some financial planners work has been driven home by the spectacular Storm Financial collapse that left thousands of ordinary consumers facing ruin.

"The risk to consumers of inaction far outweighs the minimal compliance involved in bringing financial planners under the consumer protection regime for tax advice.

"If it's good enough for professionals like accountants and agents giving taxation advice to be under more scrutiny, it's good enough for financial planners."

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About the Taxation Institute of Australia:  The Taxation Institute is Australia's largest and most diverse body of tax professionals working together to improve the tax system and the delivery of tax services through education, sharing of information and consultation.


Media Contacts:

Robert Jeremenko, Senior Tax Counsel - Taxation Institute of Australia on 0468 987 300

Craig Regan - Lighthouse Communications on 0408 448 527