The Australian tax system is missing out on long-term savings by excluding financial advice from being tax deductible, a financial adviser and lobby group representative has warned.
According to Ben Nash, adviser at Successful Ways and spokesperson for XY Adviser, the Australian government would be better off financially if clients were able to claim their advice costs back on tax.
“It does not seem to make sense that the government are doing a short-term tax grab by not making advice deductible,” he said.
“They are short-changing themselves in the long term.”
Mr Nash said tax deductibility would make advice more affordable, encouraging more people to employ an adviser and, in the long run, creating more self-funded retirees.
“Tax deductible advice would create a better outcome for society but also a better outcome for the government, where they do not have to pay out pensions or health-related entitlements,” he said.
Principal of Radar Results John Birt agreed that advice should be deductible, comparing advisers to accountants, whose services can be written off.
“I cannot see the difference between an accountant charging a fee for taxation advice and a planner charging for financial advice,” he said.
According to Mr Birt, advice may be even more important than accounting as it helps people prepare financially for retirement.
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