ifa spoke to several industry leaders on their thoughts on the following question: "Should financial advice be made tax deductable?"
"Being able to claim a tax deduction for an initial financial plan and strategic advice would provide an incentive encouraging consumers to seek financial advice.
"With the regulatory and administrative burden that financial planners now need to adhere to, in many cases it is simply not economic to provide financial advice to many in the community that actually need this advice.
"If the objective of the government is to empower the population to make sensible financial decisions encouraging them to seek financial advice is a natural extension of this.
"The amount which could be claimed as a deduction could be capped to reduce the impact on government revenues."
— Charles Badenach, principal and private client adviser, Main Street Financial Solutions
"I believe strongly in the value of advice we deliver to clients in helping them make more informed and smarter decisions, and therefore I believe our genuinely independent conflict-free advice fees should be tax deductible to the client.
Many of the business owners I work with have investment portfolios and investment properties, so when it comes to discussing our ongoing fees with their accountants many of these clients are advised that our fees are tax deductible.
This is due to the fact that these clients pay us monthly or quarterly retainer fees and receive services in relation to regular reviews of their strategies and investments, and discussions around their business on an ongoing basis.
"Ultimately they tend to receive a tax deduction on our ongoing fees if the advice is in relation to assessable income producing investments like those mentioned above."
— Adriano Donato, financial adviser, Roskow Independent Advisory
"The short answer is a resounding 'yes'.
"At present, financial advice costs relating to the production of income are tax deductible. However, limitations are placed upon the deductibility of financial advice during the advice development process as well as some aspects of ongoing advice services due to the advice being strategic rather than for the generation or production of assessable income.
"The separation and limitation of deductibility between elements of financial advice is difficult to understand due to the nexus between aspects of advice financial advice and also between the various stages of advice creation implementation and monitoring being vital in the overall generation of assessable income and gains.
"Furthermore, to make deductible the cost involved in building wealth to avoid reliance on social security and reduce the expense burden of the age pension for the Australian government would be an appropriate policy.
"Ultimately, in my view, all financial advice relating to wealth management and creation should be tax deductible as the basis for the advice is the generation of income and gains to further develop an individual’s financial position."
— Chris Smith, partner, VISIS Private Wealth
"This question is one of the most common questions my prospective clients ask during our first meeting. As many of them are happy to pay for advice, if they are able to claim deductions when lodging their annual tax return.
"The costs associated in establishing a financial plan are not tax deductible, but the ongoing adviser retainer fee may be if it has assisted in generating assessable income for the individual.
"If we take a step back and think about why people seek financial planning advice in the first place, in most instances, it is to plan ahead to ensure they have a comfortable retirement, not to be able to claim tax deductions.
"I see my role as a financial planner is to help my clients achieve their financial goals and to create real wealth for financial independence. If there are tax deductions along the way to financial independence then I see that as an additional benefit."
— Hoa Tran, senior financial planner, Omniwealth
"It is in the best interests for both the government and for consumers to make the costs associated with financial advice deductible.
"This will encourage more people to seek advice in order to establish and manage a long-term plan geared towards a self-funded retirement. This should lead to less people who are reliant solely on an age pension which in turn will ease the strain on the social security system.
"Under the current legislation, if the advice is to establish a plan or the advice does not relate to assets that generate taxable income, then the advice fees are a capital expense and not tax deductible. If the expense is in relation to ongoing advice and management of an existing portfolio then the expenses are generally deductible.
"Superannuation rules are complex and planning for retirement requires the time and ongoing guidance of a professional adviser over the long term.
"If the government are seriously concerned with the long term financial stress on our social security system and the tax revenue that underpin it, then they need to take off the short-term blinkers and make financial advice fees 100 per cent deductible."
— Paul Dunn, managing director and principal adviser, Meridian Wealth Management
"Australians face a $1 trillion plus retirement shortfall for those who outlive their life expectancy. Our government claims to be bridging the gap between retirees’ superannuation capability and their needs however further restrictions have forced our aging population to reconsider their retirement planning.
"Navigating this minefield is hard enough and to let the layperson interpret the ever changing legislative landscape is playing with fire.
"Providing tax deductions for costs relating to financial plans and associated implementation, not just ongoing advice fees, would see ordinary Australians incentivised to seek qualified financial assistance. This would make many more Australians less reliant on government assistance after their working life.
"Currently, Australians can claim a tax deduction for one-off accounting costs, which in most cases is retrospect assistance without providing qualified forward thinking financial planning advice.
"Surely upfront financial planning costs are directly related to generating an income whether it is personally or within superannuation."
— Hugo JB Sampson, senior financial adviser, LifeTime Financial Group
The chief executive and founder of a specialist digital platform believes the debate around technological innovation and financial advisers is well a...
The Compensation Scheme of Last Resort (CSLR) Bill has been referred to the Senate economics legislation committee for inquiry and report next month, ...
The former director of Perth corporate advisory firm Armada Capital will serve a three-year ban. ...