New regulatory framework for financial advisers

The end of the financial year will soon be upon us with many law changes set to start on 1 July 2013. One of the most significant of these law changes is the new regulatory framework to apply to financial advisers who provide tax advice.

Since the Tax Agent Services (TAS) regime began on 1 March 2010, an exemption has been in place to permit financial advisers to continue to provide tax advice in the course of providing financial planning advice without complying with the TAS regime.

The Tax Institute has long held the view that financial advisers who provide tax advice in the course of providing financial advice should be subject to the TAS regime on the basis that it provides a mechanism for the protection of consumers of tax advice.

With the exemption due to expire on 30 June 2013, the Government recently released the "Creating a regulatory framework for tax advice (financial product) services" Exposure Draft.

As the Exposure Draft amends the Tax Agent Services Act 2009 to bring financial advisers into this regime, we are supportive of the overall intention behind the Exposure Draft. Our submission focuses on ensuring the policy objective of consumer protection is attained. One of our key concerns relates to the education and experience requirements that will be required of financial advisers who apply to register with the Tax Practitioners Board and become subject to this regime.

Shortly following the release of the draft legislation, the Tax Practitioners Board released a draft guideline on the "Australian tax law" requirements that financial advisers applying to the Board will need to meet. The Tax Institute is currently preparing its submission on this.

Members are welcome to provide any comments they have to us by email to Tax Policy.

Robert
Jeremenko

Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.