TPB releases adviser education requirements
Financial planners wishing to keep providing holistic advice services after 1 July will have to complete a course approved by the Taxation Practitioners Board (TPB).
Days before the Australian Securities and Investments Commission (ASIC) announced it would delay its work on financial planner education (at least while the Future of Financial Advice reforms were being implemented), the TPB released an exposure draft outlining its own requirements for planners who provide advice with tax implications, including in areas such as superannuation.
If financial planners wish to keep providing advice with tax implications after 1 July, they will have to be registered with the TPB and comply with the set requirements as part of the Tax Agent Services Act (TASA).
According to the draft, advisers would have to have successfully completed a TPB-approved course in Australian tax law and engaged in the equivalent of two years of full-time relevant experience in the preceding five years.
The two-year period is reduced to 18 months if a planner holds a TPB-approved tertiary degree relevant to tax advice, and to 12 months if they are a voting member of an 'adviser tax association’.
Covering the necessary topics should fit within a single standard 12-14 week tertiary period including lectures, exercises and private study, totalling 100 to 130 hours.
“As taxation law is continually evolving, in conjunction with these learning outcomes, the board is of the preliminary view that tax (financial product) advisers should also learn skills to enable them to have knowledge of the law and apply it to problems when they are giving advice in practice, so as to keep their knowledge up to date,” TPB stated.
The board admitted that virtually any personal financial planning advice could have tax implications, and that “a balance must be struck between what is reasonably achievable within the modern educational and professional paradigm and assuring the public of high professional standards”.
“In doing so, regard has been had to the educational qualifications, and the types of providers of training and education recognised within the Australian Qualifications Framework,” the TPB said.
The Financial Planning Association (FPA) has long advocated financial planners be exempt from TASA, expressing concerns about so-called “dual regulation”.
The inclusion of financial planners under TASA means they will soon be subject to a set of separate competency training and registration requirements created by the TPB, in addition to the rules already imposed by ASIC.
“This dual regulation is a real problem because having one regulator is quite substantial,” the FPA general manager for policy and conduct, Dante De Gori, recently told Money Management.
“Having two, with the second not knowing anything about financial advice, is a problem.”
De Gori said there was little to no guidance for financial planners in the TASA Act. There will be a three-year transition for existing advisers, but anyone entering the industry after 1 July would be at risk of having a civil penalty imposed by the TPB, unless they comply with the new rules.
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