Opposition calls for tax breaks to encourage provision of financial advice

The Federal Coalition is calling for a revision of the tax deduction rules on financial advice.

Shadow Minister for Financial Services Chris Pearce said the changes would encourage those who needed advice to see a financial planner.

“Currently, there are provisions for tax deductible financial advice where it is provided on an ongoing basis,” he said.

“Upfront fees are generally non-deductible and industry sources argue that this may be an impediment to procuring advice.”

Speaking at a Melbourne Association of Financial Advisers lunch, Pearce said simple financial advice is often provided upfront as a one off.

“Such advice may involve basic matters such as consolidation or the tidying-up of a person’s finances,” he said.

“If we’re going to have tax-deductible financial advice, I think it should be focused on encouraging those who would not otherwise seek advice to do just that.”

Pearce argued these potential clients needed to understand the advice being offered and financial literacy was therefore crucial.

He attacked Labor’s move transferring the Financial Literacy Foundation to the Australian Securities and Investments Commission (ASIC).

“This Labor cut back indicates a lack of concern and understanding of the importance of financial literacy to Australians in a modern, financially-centred economy,” Pearce said.

“The Coalition believes government authorities should not have their key duties confused as ASIC’s primary role is to regulate the market, not run [the] Financial Literacy Foundation.”

He has called for the re-establishment of the foundation as an adequately funded, dedicated body.