Last week, SMART Compliance principal Brett Walker told ifa that there may be some licensees that are needlessly registering with the TPB, and that the AFA and the FPA needed to stand up for its members on that front.
TPB chair Ian Taylor told ifa that Mr Walker is technically correct in saying an adviser may be exempt from TPB registration if their clients cannot be ‘reasonably expected to rely’ on the advice given.
However, Mr Taylor does not believe this can apply to most advisers.
“What Brett is saying is that, ‘if you provide advice to your client and the client doesn’t rely on the advice, then you don’t need to be registered with the board’,” Mr Taylor said.
“Whilst that is strictly correct in terms of the legislation, the reality is, from our perspective, that there is no point in giving advice to a client if you don’t expect that the client is going to rely on that advice.”
Mr Taylor said there are some circumstances where an entity might not need to be registered with the TPB because the nature of the advice they provide does not include tax advice.
For example, he said these circumstances may apply to a mortgage broker or a general insurance broker, where the client would not be expecting to receive tax advice about that particular product.
Mr Taylor also defended the professional associations, including the AFA and the FPA, in their role in informing licensees around TPB registration requirements.
“We’ve been very active in recent times, particularly because of this upcoming renewal phase and because of the fact that another registration opportunity expires on 30 June this year,” he said.
“The professional associations have been entirely co-operative with the TPB in assisting us to get those messages out.”
Clients also do not expect to rely on “tax advice “from a life risk specialist if the only “tax advice ” provided relates to the clear provisions of the Tax Act which facilitate the claiming of a tax deduction for certain risk premiums
On Mr Taylors logic I should not have to participate in his nice little earner given I do not advise on tax affected investments and negative geared strategies.
Comments please Mr Taylor ????
We received advice a long time ago that drew much the same as Brett’s conclusion and so we ignored the incessant correspondence from the TPB reminding us to consider registering. Until very recently that is when it became patently obvious that the TPB simply expects every adviser/licensee to register with them. People need to be aware that their registration with the TPB comes with permission to allow the TPB to share information with the ATO and the ATO will use the shared information for tax surveillance purposes, including withholding your ability to provide financial services if either you, your business or your licensee is not “up-to-date” with all tax affairs (BAS, PAYG, Company etc).
TASA update – Ian Taylor (TPB Chair) agrees I am “technically” correct but believes most advisers still need to register because “the reality is, from our [TPB’s] perspective, that there is no point in giving advice to a client if you don’t expect that the client is going to rely on that advice.” To me this misses the point somewhat. “Personal advice” (as defined in the Corporations Act) is given in anticipation it will be relied upon. The TASA laws anticipate that client reliance on “tax (financial) advice services” must be reasonable and within the context of areas upon which they can rely (see section 90.15 (1) (b)) I remain of the view there is plenty of scope to disagree with Ian’s assessment. You just need to read the law and the Explanatory Memoranda behind it to see why.
If you have to pay an organisation $400 to register your dealer group, $400 to register as an adviser and another $200 to register the actual business than that organisation is always going to trying to justify it’s existence. I’m off now to register myself with ASIC, off to register my dealer group with the AML/CTF authority. Off to join a compulsory industry association as well. I’m wondering I have a pet rock in my office do I need to get it registered with anyone? I guess consumers can all sleep well at night knowing I was registered with the TPB board.