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Preamble - Friday 11 February 2011

11 Feb 11 Preamble - Friday 11 February 2011

This week the Tax Institute met with the Assistant Treasurer, the Hon Bill Shorten MP, to reach agreement on the policy principles underpinning the regulation of tax advice given by financial planners.  Also present were the planning and accounting industry bodies, Treasury, the Tax Practitioners Board and ASIC.

The Tax Institute has long been advocating that people relying on tax advice should be entitled to expect that their adviser meets the high standards set by the Tax Agent Services regime, and that they are also covered by the sorts of protective measures contained within it, such as safe harbour rules.
We agreed that the following principles should underpin the development of new regulatory arrangements:

  • Consumer protection is a key consideration.
  • Competency of financial planners to provide tax services is a means of ensuring that quality advice is provided and that consumers of these services are protected.
  • ASIC would, as far as practicable, be the key agency for interacting with financial planners and consumers in relation to tax services provided as part of financial planning services. This would minimise duplication and red tape.
  • ASIC would be supported by a strong and collaborative arrangement with the Tax Practitioners Board to utilise expertise (tax and finance), and ensure that streamlined approaches can be implemented as far as possible.
Under this regulatory framework, tax advice provided by financial planners will be subject to the Tax Agent Services regime.  While ASIC will perform a ‘front of house' role with respect to financial planners providing tax advice, the Tax Practitioners Board will be a strong partner in approving, regulating and enforcing the Tax Agent Services regime.

There's more work to be done to define the tax education requirements for financial planners and the scope of tax advice that financial planners may be permitted to offer, but these principles are a good start ahead of further detailed discussions.

Please see below for other activities this week.

Regards,

Robert Jeremenko FTIA