Financial advisers will be faced with a $1 billion compliance bill if the amendments to the Tax Agents Services Act (TASA) are passed, according to evidence presented before the parliamentary joint committee (PJC) on corporations and financial services.
At a PJC hearing on the proposed TASA amendments in Sydney yesterday, Financial Services Council chief executive John Brogden told the committee that the additional cost for the financial advice industry in complying with the new registration requirements was in the order of $1 billion.
“The cost of [Future of Financial Advice compliance] alone is $1.5 billion so the stress levels are already enormous before you overload TASA,” Mr Brogden said.
FSC policy director Cecilia Storniolo added that should the Bill be passed in its current form, AFSL holders will have to immediately amend business communications including website content, statements of advice and disclosure and promotional material.
Presenting the view of an active practitioner, Association of Financial Advisers board member and Integra Financial Services managing director Deborah Kent said that even for a fee-for-service firm like hers, the compliance costs of FOFA have been significant, and that TASA would present unreasonable additional costs.
“There is a concern that with all of the compliance costs, from updating software to complying with [fee disclosure] requirements and keeping staff in the loop, consumers may not be able to be serviced to the best of our ability,” she said.
AFA chief operating officer Phil Anderson added that all financial advisers will be affected by the changes, not just a select few tax specialists as suggested by some of the accounting industry bodies.
“There is no piece of advice that does not talk about tax in some way,” he said. “We believe they will all be caught by TASA.”
The Financial Planning Association warned that the proposed TASA changes have not sufficiently taken FOFA into account and that the two regimes could be at odds.
“FOFA is all about personal responsibility and accountability at the individual level but TASA operates at the supervisory level,” said FPA general manager, policy and conduct, Dante De Gori.
“They don’t work well together.”
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