Two peak bodies are calling for a clearer definition of the word 'advice’, as the current wording of the Tax Agent Services Act (TASA) prohibits industry super funds from providing intra-fund advice.
The Australian Institute of Superannuation Trustees (AIST) and the Industry Super Network (ISN) lodged a joint submission to the Parliamentary Joint Committee (PJC) last Friday requesting the word 'advice’ be replaced with 'personal financial product advice’, which would exclude intra-fund advice from the requirements contained in TASA.
AIST and ISN raised similar concerns to those of the Financial Planning Association, particularly with respect to the fact that the Act covers any professional who provides financial advice service where tax advice is provided.
However, the two industry fund bodies are worried that 'advice’ is not limited to financial product advice and may include general strategies.
“It is in this context that AIST and ISN do not believe that the limitation to services that are charged for as proposed in subsection 50-5(2A)(c) is restrictive enough,” the submission read.
“Professionals who provide [intra-fund advice] services are a broad group and can include call centre operators, business development officers, member education personnel and others who would not ordinarily be considered to fall under the category of financial planners, as originally conceived.”
The two bodies stated almost every discussion held with members would involve tax in one way or another and would thus constitute tax advice under the Act.
It is for this reason that AIST and ISN believe that the wording should be changed.
“Furthermore, AIST and ISN recommend that 'personal financial product advice’ have the same meaning as that contained at section 766B of the Corporations Act,” the submission read.
The submission has also called for clear disclosure as to who would be responsible for the tax advice provided. It also raised questions about how the TASA regime would work in relation to the advisers’ best interest duty required under the Future of Financial Advice reforms package.
