21 Apr 11 More on financial planners giving tax advice
MEMBER 64 writes:
"I refer to the recent Treasury announcement that Financial Planners are again exempted from the Tax Agent Services regime for yet another 15 months to 1 July 2012, with a further three year "holiday" from full compliance on the grounds that they will need time to attain the requisite tax skills. Add to this the fact that not all planners within an organisation will be required to be registered under the TAS regime, and that full tax agent registration will only be required for planners who lodge tax returns or liaise directly with the ATO and a clear picture is starting to emerge here.
Either (1) The tax and accounting bodies were too busy to be present at these consultation meetings, or (2) Treasury is so afraid of the financial planning industry that they will do anything to placate them (including ignoring the voice of the professional bodies). Reconcile Treasury's vacillation on this issue to Bill Shorten's promise to 'protect consumer interests whilst creating a level playing field' and the whole matter becomes simply farcical.
The very fact that legislation must be enacted before planners will act in the best interest of their clients (as opposed to their own interests) should be screaming volumes about the underlying integrity of the entire planning industry. The FPA welcomed this legislation is a clear admission that planners could never be expected to act ethically without legislation. This is the same industry that outsources the cost and administration of its disciplinary measures to the public purse via that Financial Services Ombudsman, rather than requiring their member base to 'self-regulate'.
The foundations of our tax and revenue collection system which has until now been underpinned by experienced, ethical professionals, governed by a doctrine of conservatism, will soon be exposed to the very same perpetrators who brought us Storm Financial and Sonray Capital, not to mention the $millions in excess contributions tax resulting from negligent financial planning advice and an industry which can only act in the best interests of a client if legislation requires them to do so. Where is our industry voice in this debate?"
TAX INSTITUTE TAX COUNSEL COMMENT: The Tax Institute understands and shares your concerns in relation to this matter. We agree with the need to ensure high standards of education and regulation of tax advice provided by financial planners in order to protect the consumers of such advice. We have vigorously represented our members' interests and concerns on this issue throughout this consultation and will continue to do so. Should you wish to discuss further, please do not hesitate to contact us at firstname.lastname@example.org.