In a joint statement, CPA Australia and the Institute of Chartered Accountants Australia (the Institute) decried the “last minute push” by the financial services industry to have the new regulatory framework deferred.
CPA Australia head of policy Paul Drum said the new regulatory framework had been in development for over three years, with “extensive consultation with all stakeholders”.
There has been “sufficient time” for the financial planning industry to transition to the new compliance framework, he added.
Institute general manager of leadership and quality Yasser El-Ansary said politicians who voted against the reforms would be “signalling their preference for protecting the interests of the financial services industry over the public interest”.
Calls to defer the introduction of the regulatory framework jeopardise “much needed consumer protection in this area”, said El-Ansary.
“It’s time for the financial services industry to step-up to the plate and lift their standards in the delivery of tax advice to consumers,” he said. “The accounting profession has complied with these regulatory frameworks for decades.
“Financial planners must not walk away from these vitally important reforms now, at this eleventh hour.”
Institute of Public Accountants (IPA)chief executive Andrew Conway said all tax advisers should operate under the same professional and ethical standards.
The comments follow intense lobbying by advice industry stakeholders. Financial Planning Association general manager, policy and standards, Dante De Gori, was in Canberra earlier this week to lobby MPs for excise of the TASA-relevant parts of the Tax Laws Amendment (2013 Measures No. 2) Bill 2013, which would see financial advisers who provide tax advice register with the Tax Practitioners Board from July.
Earlier this week, Association of Financial Advisers chief executive Brad Fox described the proposed regulation as “rushed and flawed”, arguing that the consultation with industry has not been sufficient – a charge seconded by Coalition MP Steven Ciobo, who tabled a report in parliament which said the lack of sufficient consultation process and timeframe on the government’s TASA agenda was “arrogant”.
There are more excellent professional Financial Planners and Accountants than poor and they all have a place in their respective service and responsibilities towards their clients.
If we can stop trashing each other and learn to understand how we can benefit with some mutual respect, I guarantee we will be in a better space.
As long as the client is satisfied with servicing arrangements, it should not matter how we are paid, be it commission, fee for service and ongoing engagement fees.
As at the 01/07/2013, there will be more transparency. Let’s roll with it and do what we do best and that is servicing the community.
guys,
Accountants and Financial Planners have similar goals, its the communism of the Industry/Union Based Funds and this Government you need to address your anger at. Not Fees Vs Commisions and putting out each others mistakes. Both have common goals different skill sets
[quote name=”Melbourne Accountant”]Don’t you just love it. Commission and trail based sales people – read financial planner (who last week were selling life insurance or used cars) are lecturing accountants (people with real qualifications and business experience)!!! Lets get real here. The community trusts accountants because they work in the best interests of their clients – not themselves. They don’t need to provide a SOA to cover their ass for poor advice where their clients lose money. Look at the ASIC survey each year. Look at the poor advice consistently provided by they used car salesmen. And now this incompetent government wants these flyboys to give tax advice ? Lets get real. Thankfully they stil lcannot !!![/quote]
Over the years I have fixed more mistakes created by slack accountants than i can poke a stick at. you need to get real about your glorified bookeeper status . Just like there are bad planners , there are just as many useless accountants.
Wildcat -as you know we have had FP claiming that they need to bill $700k to make $200k after expenses.
Lets say one is very productive and has 175 clients on a retainer of $4k PA.
Sorry, but I still don’t see how one would need $500,000 per FP to run this business. Even if you have a full time admin for each planner that would come to well less than $100k including employer costs.
Maybe your para planner is charging you too much. At $500 a pop with 175 clients that would come to about $87k.
So a FT admin per planner (well over the top in my book) and $500 per review for the planner should be less than $200k. Where is the other $300k being spent?
Commercial reality – successful business in 3 different countries over past 20 years. Multi million SMSF – I do think I understand commercial reality somewhat and I’ve never billed at $300 an hour for my time. Working and building a business is a long hard slog, not a get rich quick deal.
Steve jj, you are correct about the issue with FP’s and you are correct it was wrong (trees). Amounts invested were 5-10% of accounting placements. Both are wrong, but it is a question of scale and prudence. At least FP’s used other assets than just trees, it was some accountants that got their licence from great southern that were the real problem.
What you are not correct about is the overhead issue. How do you think admin staff, para-planners etc get paid. A planner has to support these ppl too and they are overhead, without them there is no service capacity. If you are remotely close to anything other than a one man business you will understand this.
Your comments are not made with any understanding of commercial reality.
Wildcat – there were plenty of FP around in 2003/6 that made a very good living out of the 7-10% kickbacks involved with ‘trees’.
And that is what is wrong will sales commissions – account or FP, it’s just wrong. Sucking the life blood out of mums and pops.
Simon McGrath – you need to stop thinking about the small fry in this world. Your CPA does what you want him/her to do.
Who do you think advises BHP/ Rio / CBA/ Apple / Google etc to minimize their taxes. It’s not a FP that’s for sure.
The accountancy profession has saved corporations trillions of $ over the years.
And no I’m not an accountant, but the person who is does a great job at reasonable rates. And not at $300/400 per hour as some FP claim they need to pay overheads.
Frankly many of the posts do FP no favors at all. Better to say nothing and just keep taking the $ from the folks that need the emotional support required from a salesperson.
Melbourne Accountant, all the $200k to $500k great southern tree losses were provided by accounting firms, not professional advisers. No true financial planers have been implicated here, just accountants trying to “save tax”. Gimme a break.
Accountants have until 2016 for limited licencing and this debate has been already running for 2-3 years. Planners were being given 4 weeks, until the legislation was pulled this week on TASA. I have not heard any cries that it should not be reviewed, and if having merit, be implemented in a timely manner and where accreditation can be constructed, delivered and attained.
Let’s just be professional about legislative process as well shall we? And while we’re at it, professional in important debates as well!
Dave, Laurie, interesting comments. Obviously you must know a lot of financial planners that I don’t. I am well aware of the legislative requirements and also the minimal education requirements (PG 146 compliance – what a joke!!) financial planners need to complete. Both I and my clients have had planners over the years. The planners have done really well collecting their commissions and trails. Me and my clients however have been left with huge tax bills and investment losses from poor advise driven by returns to the planner not the client. And you are delusional if you think this has changed. I am well aware their are now more “qualified” people in the financial planning industry but the vast majority are not. ASIC’s annual surveys tell us that year after year after year. Would you like me to link you to them so you can read them for yourselves ?
Melbourne accountant.
Your comments are noted –not very professional and incorrect. You obviously have not looked at the legislation. If anyone wishes to be registered as a “””full Tax agent”” they MUST play in the same paddock as any other tax agent in qualification and experience. Planners offer basic advice in relation to their specific advice with a paragraph to refer to their accountant. Most will still follow this method and if they need to lift their “game’-so be it. The rest will (if qualified) go the next step. Its better to work together but some like yourself like to ignore the short comings of professions -even your own- and remind me of a book I read a long time ago–animal farm. As to who has “real Qualifications”–you may be surprised of who and what is out there. Each to their own.
For a start, I am a Chartered Accountant but chose to move into Financial Planning 26 years ago. You obviously have no idea what Financial Planners do, nor the regulations under which we operate and are required to give advice. Financial Planning is a forward looking profession wheras accountants are always looking at events of the past.Your comments are obviosuly based on the financial planning industry of 10 plus years ago so next tme check your facts before expressing and opinion. Go back to your lofty ivory tower along with Robert MC Brown.
Don’t you just love it. Commission and trail based sales people – read financial planner (who last week were selling life insurance or used cars) are lecturing accountants (people with real qualifications and business experience)!!! Lets get real here. The community trusts accountants because they work in the best interests of their clients – not themselves. They don’t need to provide a SOA to cover their ass for poor advice where their clients lose money. Look at the ASIC survey each year. Look at the poor advice consistently provided by they used car salesmen. And now this incompetent government wants these flyboys to give tax advice ? Lets get real. Thankfully they stil lcannot !!!
I went to see my (CA) accountant the other day to lodge my tax return and he tells me he does not give “financial advice”. what gives! he just does tax returns. (and collects a hefty fee each year!) no soa, no opt in, no fds, no afsl, basic expensive service, no wealth creation.
Laurie
if you read the draft requirements re education and experience (TPB ), there is a big chance you will NOT need to do anything further, don’t panic, be happy.
I am a qualified Chartered Accountant who has practiced solely as a Financial Planner for 26 years and as an accountant for 13 years before that. I have a B Comm(Melb) which included units in taxation and accounting. I also have a DipFP which also included a Tax unit for me to become a CFP. This whole TASA (or should it be TASER) proposal means that even though I have been giving incidental advice to my clients for 26 years based on both my qualifications and experience, now means that I have to do a mickey mouse course and become registered as a Tax Agent when I have no desire to prepare tax returns but simply wish to continue to give advice as I already have. Once again we have ill-conceived and ill prepared legislation from a government who has no right to govern and simply wishes to keep adding more an more regulations to business. This is a bad joke.
As I understand the legislation, planners will continue to advise as they do so presently. If you wish to become a “”full””registered tax agent-that’s a different matter. Present PI covers what we do at present. The rest is unknown – even the TPB states-no legislation yet, so they don’t know but obviously they have a plan in place. Education wise- are we good enough for what we do- you know the answer already. Lets get the questions right and then we can resolve the issues. Be positive, if we need further education- there are your CPD points for next year. Education hasn’t hurt anyone yet. September will only remove one problem, let the professional bodies solve this one.
The financial planners and accountants have for years given poor advice at the cost of their clients. It is about time that both industries start acting more professionally and start focusing on their clients rather than themselves. Having more licence criteria will only improve both professions
The FPA supports the proposal for Advisers to come under the regime, but the legislation (i.e the detail) was poorly drafted by Treasury. We simply want these oversights to be fixed before it comes into law. For example, no new Advisers would ever be able to register due to the “prior experience” requirement, and no existing Advisers would be able to register due to existing PI’s contracts only covering incidental tax advice falling under the “general advice” umbrella. Do these Accounting bodies even read the legislation before writing their PR releases??
Funny how financial advisers are targets of every self serving, self absorbed group. FPA, CPA, ICA, IPA, Labour, union funds whoops industry funds etc
An accounting body talking about “standards” and “stepping up to the plate” simply does not wash.
What a load of bulldust. The Accts body pushing for Planners to be brought under The Tax Agents Services Act is nothing but argy bargy from a stronger professional association.
Has an adviser ever tried to lodge tax returns as part of their offering?
Its all about gaining leverage to maintain their carve out for unlicensed SMSF advice.
Paul Drum and Yasser El-Ansary should focus on their own profession before lashing out at others. I have several clients with massive debts to the ATO thanks to dodgy advice from a trusted accountant. My uncle lost his business and his home due to bad advice. My best mate received bad advice, costing him thousands of dollars. I was also burnt by an accountant, costing me several thousand dollars. None of us received a cent in compensation. There were no Statements of Advice. No Licensees or Financial Industry Ombudsman to lodge a complaint with. Lives were ruined and the accountant walks away.
This is really a case of “the pot calling the kettle black”. How many years has the financial planning industry complained about accountants providing financial advice when they’ve not been licensed to do so? When did accountants comply with the regulatory framework for provision of financial advice?
I’m all for reform and appropriate licensing, but “do it right, do it right first time”.