The Commonwealth Bank has used its submission to the Financial Systems Review to call for the upfront payment of financial advice fees to be made tax deductible.
In a comprehensive submission launched today, the bank referenced tax deductibility as one of the mechanisms which would improve the accessibility and affordability of advice and pointed to the current distortions which existed as a result of ongoing fees being tax deductible while upfront fees are not.
“The Commonwealth Bank recommends making the cost of financial advice tax deductible for consumers and unifying treatment of the different forms of payment for financial advice,” the submission said.
It said such a move would be consistent with the objectives of making advice more accessible and affordable for more people.
The submission also claimed that uniform tax deductibility for upfront and ongoing fees would not only address the current distortion but address greater retirement savings.
The bank’s submission has also called for the removal of barriers to the development of retirement income stream products but has argued that, contrary to perceptions, Australian retirees do not have a lump sum mentality and that the taking of lump sums has been declining over time.
