SMART Compliance principal Brett Walker said there may be some licensees that are needlessly registering with the TPB, adding that the advice industry bodies need to stand up for its members on this front.
“Professional bodies like FPA and AFA play an important role in building industry standards but also need to stand up for members in the face of unnecessary compliance measures,” Mr Walker said in an email to ifa.
“If my analysis is correct, it begs the question why industry bodies like these did not pick them up and push for the same kind of relief from regulation the accounting lobby has successfully achieved for its members in the form of ASIC INFO 216.
“On any reasonable analysis, there appears to be room within the TASA rules for many AFSLs to not take up TPB registration.”
Mr Walker said in a LinkedIn post that there are five elements of tax advice that must all be satisfied in order for a licensee to qualify for compulsory TPB supervision.
One of those elements is around whether a client ‘can reasonably be expected to rely’ on a licensee’s financial advice for tax purposes.
Mr Walker noted that clarification around what that means may save licensees “the bother of having to register with the TPB”.
“I suspect many [licensees] will need to consider if [they] have been pushed into a compliance regime not actually constructed with [their] business in mind,” he said.
Mr Walker said he is developing an advice self-assessment tool to assist licensees on making better-informed decisions around TPB registration.
The FPA has quietly gone about it’s dealing with Government to manipulate legislation that means it is impossible to leave these bodies. No doubt recent education reforms coming into play from 2024 will allow some leeway for continuing professional development, with evidence being membership of an association. Much like TASA requires membership as evidence of CPD. So much like the CFP logo, much like their 3 year opt in release, (soon as your membership lapse, you’re in breach of the 2 year rule) much like TASA they have clearly stiffed advisers and forgotten whom they represent. Hear any of the big banks do something wrong these days and the solution is always membership. We’re being screwed again.
Bill Brown the future won’t sustain advisers that don’t offer clear advice. Your SOA’s may well “suggest” that IP “may” be tax deductible, but I think we can all be sure that your conversation with the client says that IP is tax deductible. As a client I wouldn’t want you to be paid anything for only doing part of your job. If you are to be paid as an expert then your advice should portray that expertise, and being vague on the tax deductibility of IP premiums for a particular client is not expertise at work. Risk specialists require many areas of tax expertise – such as the effect on TPD payouts held inside super – so get with the program Bill and accept that experts need to be qualified and registered. Doctors do, surgeons do, physio’s do, Pharmacists do. Financial advisers do too.
I’m sure many would agree with you. However most advisers are seeing this as a revenue grab from the Government. Increased licensing and rego costs are impacting a lot of industries at the moment and for 18,000 planners to be paying $400 for rego, another $200 for their business and $200 if self licensed, is at least another $7.2 million in the Government pockets.
Why do we bother with these irrelevant industry bodies. Oh I forgot compulsory membership!
More compliance means more training courses to sell. So why would FPA, who lives off training course revenue, not want more compliance?
Maybe a conflict of interest between the members who pay the fees and the employees who work for the organisation providing paid training for members?
Once again let down again by the professional body that was supposed to be looking after our interests. When the TSA nonsense first started I objected to both the AFA and my licensee that merely because I suggested in an SOA that the clients contributions to income protection insurance “may” be tax-deductible, or that insurance premiums placed into a superannuation vehicle which did not contain investments “may” also be tax-deductible, in no way did such “advice “ make me tax advisor as determined by the TPB.
Brett Walker has let that the cat out of the bag – he actually read the legislation, unlike the AFA, apparently. I don’t recall either the AFA or my licensee telling me there were five elements of tax advice that must ALL be satisfied in order for AFSLs ( and their advisers ) to come under TPB supervision.
Did someone think that by saluting the TSA legislation and pledging obedience and compliance , brownie points could be earned with the Govt. Just like waiving through ASIC Report 413 , without challenge.
Risk advisers do not put themselves out as tax advisers, and it beggars belief whether any of my clients “can reasonably be expected to rely on the licensee’s financial advice for tax purposes”. Remembering of course that my advice is legally the advice of the AFSL.
The AFA should URGENTLY apply for a reversal of this situation, and remove the burdensome TSA training levelled on risk advisers. For God’s sake, there is even a Training Unit on calculating the Capital Gains tax payable on the sale of an investment property in current TSA “Training”. That’s a job for accountants !