Planners should fall under TPB, says NIA

Financial planners should be licensed under the Tax Practitioners Board (TPB) like any other industry that provides limited or other tax agent services, according to the National Institute of Accountants (NIA).

The Minister for Financial Services and Superannuation, Bill Shorten (pictured), yesterday released an options paper that set out that financial planners should be licensed to provide tax advice under either the TPB or the Australian Securities and Investments Commission (ASIC). The paper outlined that Option 1 would “bring tax agent services provided by financial planners permanently within the tax agent services regime and be regulated by the Tax Practitioners Board”. Option 2 would see possible changes to the Australian Financial Services Licensing regime, or its enforcement, to ensure financial planners offering tax agent services were regulated to the same standards imposed on tax agents.

While financial planners may argue that they are already governed by strict regulation under ASIC, NIA senior tax adviser Tony Greco said the NIA questioned whether ASIC was able to “do the job”, and supported Option 1.

“If you look at it, accountants who want to play a part in financial advice have to go off and separately register under ASIC — so that’s no different to if financial planners want to provide tax advice then they might also have to register under a different body,” said Greco.

Greco said the sole responsibility of the TPB was to make sure that any institution that provided tax advice was governed by its rules, adding that other industries that provided limited tax advice — such as quantity surveyors and valuers — had already come under the new regime. Greco said that it would therefore make sense that financial planners came under the tax agent services regime, since there was a public interest to be served.

Financial Planning Association chief executive Mark Rantall has previously stated that the National Tax Agents Regime would create additional and unnecessary regulatory burden for financial planners who only provided incidental tax advice. However, Greco said that was no longer a viable excuse.

“That was once the argument, but unfortunately the way that the law has been set up under the tax agent services regime, there is no such thing as incidental,” he said, adding that it was as simple as the question ‘do you apply tax laws to a client’s individual circumstances?’

Greco said that the registration process with the TPB was not necessarily as onerous or costly as financial planners may expect, and the licensing would depend on the level of tax advice provided — although education standards were likely to be higher than RG 146.