30 Apr 10 Financial planners and the Tax Agent Services RegimeOn Friday, 23 April 2010 the Assistant Treasurer announced that the Government will exempt financial planners from the Tax Agent Services Regime for a period of 12 months. The announcement also clarified the treatment of 'in-house' advisers and custodians. The Taxation Institute described this as a disappointing step backwards for consumer protection, which was at odds with the legislation's intention that anyone giving tax advice should follow consistent requirements in education, service levels and ethics to maximise consumer protection in this often difficult area. People receiving and relying on tax advice from anyone - be it their accountant or a financial planner - should expect that the advisor not only meets the new regime requirements but that they as a client are covered by the protective measures that it offers. Tax agents have no issue with being exposed to greater scrutiny and professional requirements, but these should apply across the board. Many financial planners cannot help but give tax advice in the course of their work.
We will be formally responding to the Government on this announcement and actively participating in the industry consultation phase, which will determine which of two permanent options should be applied to financial planners.
The Assistant Treasurer indicated these options were:
- to investigate and implement what changes, if any, might be made to the Australian Financial Services license regime or its enforcement to ensure that it provides a comparable level of regulatory supervision in relation to tax services provided by financial planners in comparison to the level of supervision imposed on the providers of tax services regulated by the Tax Practitioners' Board (TPB); or
- to bring financial planners permanently within the tax agent services regime and therefore be regulated by the TPB, but to do so in a way that minimised any additional compliance burden.