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.”
Three comments – a) Socialist “wannabe prime minister but the current mess is not my problem” Shorten is hellbent to destroy the lives of Financial Advisers before his pathetic party is thrown onto the political scrapheap – b) Shorten’s mandate from his union cohorts is to kill free enterprise superannuation and force everyone to union funds (whoops they call them industry funds) as the money they reap is replacing falling union fees due to falling memberships – c) counting many intelligent accountants among my lifelong friends and business referrers to my financial planning practice, we are all amazed at the stupidity of the accountants supporting TASA and their pathetic whining, most who are non-entrepreunarial individuals or firms lacking personality whom I would like to debate on tax issues involving financial planning and see who knows the tax laws.
[quote name=”Melbourne Accountant”]Well touche, at least they are not recommending poor performing outdated expensive managed funds so they can pick up a nice commission and which are totally inappropriate!![/quote]
No they are recommending SMSF for $20k so they can pick up the yearly fees
This turf war between accountants and financial planners borders on the ridiculous. In this current atmosphere of hysteria, masquarading as informed debate, many have forgotten that current legislation requires a financial planner to have a clear understanding of the tax implications of any advice given. So, what is wrong with the following statement accompanying an SOA: “Current legislation requires financial planners to have a clear understanding of the tax implications of any advice provided. However, you are advised that we are not tax experts. Accordingly, you should refer this matter to a registered tax agent or accountant for confirmation or if you have any other taxation concerns”. I have no wish to become an accountant or tax agent, having excellent on-going relationships with several.
This,on top of the $Billions that have been spent to supposidly prevent another “Storm” that by comparison cost hundreds of millions. It is unbelievable. The Labor boys will get there way. We will all have union funds, administered by the best brains in the Labor Party. As true socialist Bill and the boys will only be paid a fair days pay for a fair days work.$600,000 pa +++ for Bill. The remainder for the worker on $40,000 pa.
How unfortunate. Financial planners would need to meet the same professional and educational standards as others that give tax advice. No wonder they opposed the legislation. It would mean financial planners would need to become ah – professionals!!!
does anyone have the feeling this government no longer wants Financial Planning as a profession ?
Is that $1B cost attributed to productivity lost, or revenue to business consulatants and lawyers, or both. What about industry super funds providing TTR advice….I gather they are impacted by this also.