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12 Dec 14 Tax Practitioners Board Financial Adviser Consultative Forum

On Thursday 27 November 2014, Tax Counsel Stephanie Caredes attended the inaugural meeting of the Tax Practitioners Board Financial Adviser Consultative Forum. The Board issued these key messages following the meeting:

Update from the TPB

The forum noted an initial iteration of a status report and the following was noted during the overview provided:

  • The TPB is receiving a small but steadily increasing number of applications from Australian Financial Service Licensees (AFSLs) and Authorised Representatives (ARs). As at 26 November 2014, there have been 4,241 notifications (of which approximately 10% are AFSLs). Positive feedback was received in regard to the notification process.
  • A number of tax (financial) adviser notifications are expected before 31 December 2014 pursuant to having a longer registration period (and having more time to meet the standard eligibility requirements to renew registration).
  • It was highlighted that the TPB has a shutdown period from midday 24 December 2014 and staff will not have access to the office again until 2 January 2015. It is therefore strongly encouraged that large AFSLs (those that are seeking to register more than 20 ARs) notify as soon as possible (preferably by 15 December). This will facilitate a streamlined process, wherein the TPB can provide relevant prepopulated data for the prospective registrant.
  • An AFSL who wishes to notify by 31 December 2014 but contacts the Board after midday 24 December 2014, will receive an automated email response with accompanying template (and instructions) that will need to be completed and returned to the tfa@tpb.gov.au mailbox by 31 December 2014.

 Communication activities

  • The Forum noted the listing of recently issued tax (financial) adviser information products, including the application form to become a TPB recognised association, as well as ongoing updates to the Frequently Asked Questions document. It was highlighted that the TPB has been active and appreciates feedback received on draft papers (including early in-confidence iterations prior to release of public exposure drafts) as well as support in communicating key TPB messages. It was reiterated that the TPB’s focus during the notification and transitional phases is to flexibly support and assist financial advisers who wish to be or need to be registered with the TPB.
  • It was also noted that while the current communication emphasis is on the notification phase, preparatory work is in train for the purpose of providing an additional communication focus on the transitional and standard requirements from the first quarter of the 2015 year (including in relation to form design and draft papers). Activities will expand to reach representatives (including employees, directors and other individuals) as well as AFSLs and ARs.
  • The TPB is seeking input in relation to the best ways to communicate with the broader financial adviser community, particularly in reaching employee representatives. Further, the TPB would welcome being involved in association conferences, webinars etc. to assist with communicating to members as appropriate. Any input or suggestions can be sent through to TPBCommunications@tpb.gov.au.

Policy matters

In addition to the policy matters noted above at the ‘Tax Practitioners Board Consultative Forum’, the Financial Adviser Forum also noted a proposed update to a TPB information sheet (TPB (I) 10/2011), for the purpose of extending coverage to tax (financial) advisers, setting out the TPB’s views in relation to:

(i) circumstances in which an individual will be required to demonstrate knowledge of the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (Code), for the purposes of registration; and

(ii) the content requirements of the TPB in relation to being able to demonstrate such knowledge.

In particular, the information sheet would provide assistance to those financial advisers who had previously completed a course of taxation law that would satisfy TPB requirements other than for the course not including a specific reference to the TASA including the Code. Further, it was noted that the information sheet would assist TPB-approved course providers in developing courses that meet the TPB’s requirements. It was confirmed that the updated information sheet is expected to be published soon.

Professional practice issues

  • For the purpose of assisting the TPB in establishing an appropriate and relevant forward work program for professional practice guidance, specific feedback was sought from Forum members in relation to what is considered priority Code items (five highest priority items, in order of importance) on which the TPB should provide guidance to registered tax (financial) advisers.
  • It was observed that a number of obligations under the Code are similar to the obligations of AFSLs and their representatives under the Corporations Act 2001 (Cth), and that the TPB has already issued a number of principles-based guidance products on the operation of the Code (which include examples relevant to tax and BAS agents).
  • It was also reiterated that the TPB’s initial focus during the early stages of implementation is to flexibly support and assist financial advisers who wish or need to be registered with the TPB. Further, the TPB is committed to consultation before finalising its approach to key matters.
  • It was suggested that priority consideration be given to providing guidance in relation to those items concerning confidentiality, competency, and conflicts of interest.
  • It was also highlighted that the TPB would welcome feedback out of session, including the provision of relevant examples related to the Code items that are specifically relevant to the financial services profession. It was also noted that pre-exposure draft material is expected to be provided at future forum meetings for feedback, prior to releasing as exposure drafts for wider public comment.

Items suggested by Forum members

Insight was sought into the complaint process, including the role of the Australian Securities and Investments Commission (ASIC), Financial Ombudsman Service (FOS) and Credit Ombudsman Service Limited (COSL) in relation to tax (financial) advice. The following was noted during the brief overview provided:

  • The TPB is in regular consultation with ASIC and there is a Memorandum of understanding (MOU) in place between the two agencies.
  • The TPB has been in a number of meetings with FOS and COSL to understand the respective jurisdictions. While the TPB and FOS and COSL deal with similar entities, the nature of the TPB’s work is a focus on the provision of tax agent services and the TPB’s regime is a sanction-based resolution process. In contrast, FOS and COSL are external dispute resolution (EDR) bodies that have a compensatory based process.
  • The TPB considers matters on a case-by-case basis, considering the particular circumstances and following due process.

Other business

Symbol

  • It was noted that a registered agent symbol was recently released for registered tax and BAS agents and the forum endorsed the TPB pursuing an application to extend coverage of the TPB registered agent symbol to tax (financial) advisers – in particular, a tax (financial) adviser would be entitled to use the symbol when they are registered or renew under the standard registration option (effectively from as early as 1 January 2016).
  • It was noted that the TPB is hoping that the requisite approvals (including the Australian Competition and Consumer Commission) will be provided in time to enable availability by the start of the standard registration phase.

Members who require further information in relation to the above should contact us at Tax Policy.