Fintech and advice startups to flourish

Financial advisers in start-up phase and new fintech companies may reap rewards, with measures announced in last night’s 2015 Budget set to encourage innovation and competition within the sector.

In handing down the Budget, Treasurer Joe Hockey outlined plans to provide funding to develop a single online portal for business and company registration, publish new computer code to enable developers to build new registration software and reduce the number of business identifiers.

Finally, the government said that it would from 2015/2016 provide funding to ASIC to implement and monitor a regulatory framework to facilitate the use of crowd-sourced equity funding, including simplified reporting and disclosure requirements.

The government has also proposed that from 1 April 2016, a fringe benefit tax (FBT) exemption will be available to small businesses that provide employees with more than one qualifying work-related portable electronic device, even where the items have substantially similar functions.

Madeleine Mattera, head of financial services at Grant Thornton Australia, said these incentives will encourage startups and small business to become the "Aussie Google of tomorrow".

“It encourages important competition for the financial services industry but it also provides real opportunity for companies as well as super funds to invest in innovation and to work with new startups in a collaborative way. The support promised by the government in facilitating new opportunities for crowd-source funding and expanding tax concessions for Employee Share Schemes are all a step in the right direction to providing support for fintech,” she said.

FPA general manager for policy and conduct Dante De Gori said these moves, in tandem with the concession package for small business, would be of benefit to financial planners in the start-up phase of their business cycle.

“There are some great concessions for them in tax savings and immediate tax deductions for capital purchases up to $20,000. It is also good news for small business clients of financial planners as these changes present great opportunities for financial planners in supporting and providing advice to these clients,” he said.

Nevertheless, AFA chief executive Brad Fox said that financial advisers should have “honest and meaningful conversations with people contemplating starting a small business".

“Financial advisers, most of whom are self-employed, understand the financial and emotional needs of their clients and are best placed to discuss the real challenges everyday Australians will face when entering self-employment or small business ownership,” he said.

 

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