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18 Feb 11 More on financial planners and tax advice

MEMBER 19 writes:

"Speaking here from the hip pocket - ours and our clients!

Over the years we have avoided offering financial planning services, believing them to be a conflict of interest with us as accountants and tax agents. In that time we managed to divert clients away from many well known schemes, so we felt we had a good analytical record in sussing out the thieves and con artists.

Clients were of course looking for that support and the stupid licensing laws that stopped us talking with clients about specific investments didn't help. So we searched and searched for a reputable, honourable financial planner to assist our clients where they wanted that service. Found one or so we thought. After bedding himself down with us over a couple of years he slowly introduced such items as 'Great Southern' to us and our clients. Talk about an effective and efficient con artist! Our abilities to identify the smooth criminal fell into a large hole!! This clown should be locked up for many years.

We started to get an idea something wasn't right when he began asking our clients for far more details than he needed to look after them from a financial planning angle. But we were flat out with our work and sadly didn't get aggressive with him.

Meanwhile he had signed up a significant number of our clients for various financial planning matters including - yep! 'Great Southern'!!!!

Prior to it falling in a hole we cut ties with him. He then conned another accountant (5 hours away) to become a director of a new company he set up as an accountant/tax agent! Of course he then took the majority of our accounting/tax clients for whom he had been doing financial plans. No professional ethics letters or the like. Nor did he have a registered tax agent working in the office despite meetings with tax clients and lodgment of tax returns! No sign of a qualified accountant either for around 18 months after he kicked off, and still no registered tax agent in that office. He kept advertising though and still does without a 'public practice certificate holder' in his business!!! Oh yeah he's still 'new' as well!!! You're telling me! New and knows nothing except how to con and charge unsuspecting honest people.

The ATO knew of this and knows of this and did/does nothing! The Tax Agent Board knew of this and did nothing!

Not long ago we were served with papers suing for recovery of $100,000 in penalties by an ex client, who had his tax work done by this financial planner, had to pay to the ATO for a stuff up. We had a good look into the claims as you can imagine - all new to us. Never had such a claim in our 20 years of operations!

That planner had actually created the problem but we had prepared the return for the year before the big problem. The lawyers tried to join us to the action because of our previous involvement. Interesting it was! Unfortunately for the planner everything sheeted back to him once he became a tax agent!

We had a good laugh about that and it has proved useful fodder to demonstrate to locals how incompetent this 'award winning financial planner' is.

And the Government wants to allow these people to give tax advice!

Stick to wasting revenue on pink batts and school libraries is our suggestion. It’ll be cheaper for the retirees in the long run.

God help us!!"

MEMBER 20 writes:

"The accounting bodies including the Tax Institute may think that they have come up with an acceptable arrangement for ensuring the competence of tax advice by financial planners. However the way that I read it, the accounting and tax profession has again lost to the product salesmen. There is no way that a person who has attained reg 146 standard can compare to a registered Tax Agent. Nor is the taxation educational standard of a person holding a Diploma of Financial Services or a CFP equal to a registered Tax Agent. The standard that is required to give tax advice on structures, superannuation, investments and life insurance is of the highest level and can only be obtained by a registered tax agent.

Why does the tax and accounting profession always have to lose to the product salesmen?"

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