Should all advice be tax deductible or just some?
Most financial advisers believe financial advice should be tax deductible for clients, but a significant cohort believe it should not be tax deductible for advice around product sales.
A survey conducted by Money Management has revealed that while virtually 100 per cent of advisers support the Government moving to make advice tax-deductible, there is disagreement around whether that deductibility should be applied to all advice.
In fact, the survey revealed most support for highly specific advice around transition to retirement (TTR) and superannuation, with significantly less support for where life/risk sales are concerned.
The survey has been undertaken at the same time as the Financial Planning Association (FPA) has pressed the Government to make advice tax deductible around advice helping people decide whether or not to opt in to insurance inside superannuation.
What the Money Management research has revealed is that while 70 per cent of respondents supported tax deductibility for “holistic” advice they became somewhat more selective when they were asked to specify what sorts of advice should qualify.
Where life/risk advice was concerned, only 56 per cent of respondents believed it should be tax deductible, while nearly 44 per cent believed it should not.
This compared to the 75 per cent who supported superannuation advice being tax deductible and the 69 per cent of transition to retirement advice.
Both the FPA and the XY Adviser group have been lobbying the Government in support of the tax deductibility of advice but have not specified any particular segments, although the FPA recent told the Senate Economics Legislation Committee that advice should be made tax deductible in the context of decisions around insurance inside superannuation while the XY Adviser group’s Clayton Daniel has said it is campaiging for tax deductibility on the basis of advice being treated like a profession.
“Financial advice clients deserve the benefit of tax-deductible advice,” he said. “This will offset rising costs of financial advice fees, and also provide a clear path for more Australians to receive advice.”
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