End TPB/FASEA duplication says FSC

13 September 2019

The Financial Services Council has called for an end to the duplication which sees tax financial advisers answerable to both the Tax Practitioners Board (TPB) regime and the Financial Adviser Standards and Ethics Authority (FASEA).

In a submission filed with the independent review of the TPB and The Tax Agents Services Act 2009, the FSC pointed to the rapidly-changing nature of the regulatory environment for financial advisers and urged simplification.

Further, it has urged dialogue between the TPB and the FASEA to achieve such an outcome.

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FSC chief executive, Sally Loane, said the FSC was recommending a single regulatory regime for advisers who provided both tax and financial advice, replacing the current regime with overlapping and duplicated registration.

“The FSC’s preferred approach would mean advisers adhere to one code of ethics, and are overseen by one code monitoring body that helps deliver the protections consumers expect and that advisers are obliged to adhere to,” Loane said. 

“Ongoing changes to the regulatory environment for financial advisers, including new professional and education standards are transforming financial advisers into a profession in line with other professions such as accounting and law. 

“These changes present a timely opportunity to integrate Tax (Financial) Advisers (TFAs) into the regulatory framework for financial advisers.”

This reform would bring TFAs into a single regulatory regime under FASEA reducing unnecessary costs and bringing greater clarity to consumers and advisers. Advisers would continue to be bound by other regulations including privacy and anti-money laundering laws.

“This reform would not mean a decline in the standards for TFAs – the FSC’s proposal would just remove unnecessary regulatory duplication and overlap. It would also mirror the approach for lawyers who do not need to register with the TPB given their existing strong regulatory structures,” Loane said.

“The FSC’s recommended approach means consumers would not have to engage with the TPB for the tax component of the advice they receive as well as the Code Monitoring Body for financial advice.

“Ensuring a simplified regulatory regime that reduces regulatory overlap and is easier for customers to navigate is thoroughly consistent with the recommendations of the Hayne Royal Commission,” Loane.

The FSC considers the TPB and FASEA should continue to have open dialogue as these new standards are implemented and to develop a single regime for financial advisers. 

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This is a sensible and obvious move. But what about the duplication and overlap between FASEA Code Monitoring and the newly announced Hayne/Frydenberg "Disciplinary Body"? Given Frydenberg's intention to roll this out next year, implementation of the FASEA Code Monitoring body should be shelved for the moment, and its functions integrated with the new body. This bloated conga line of regulators is making it harder and harder for consumers to access affordable professional advice.

we also need to advocate for licensed and registered financial advisers working under an afsl to be exempt from the requirement to hold an acl or be authorised rep of an acl holder to provide credit advice. the qualification to provide credit advice is a cert iv in financial services.

we hold far superior qualifications already this is another duplication that needs to be rid of asap

many financial planners also offer advice in this area which we should as we are the most appropriately qualified people to do so, with at least a grad dip in fin plan or for those with higher like m.fin plan

plus advice like reverse mortgages which are going to be the norm in future years, should only be provided by a licensed and registered financial planner

can i please encourage my dear professional colleagues to consider expanding their practice into credit advice. we should own this space

In response V.Smart FP.....I respectfully disagree with your view. I am a Licenced Credit Adviser, Financial Planner and a CPA Member (albeit I do not practice accountancy) who spent almost 4 decades working in Credit & Lending and Wealth Management. I can assure you that both Finance and Financial Planning are highly complex far reaching professions with their own skill sets, complexities and challenges. Just because you are Financial Planner does not immediately render you better qualified than, or above a Credit Adviser. They are totally different professions requiring totally different but yet sometimes converging skill sets which come with totally different challenges and require years of experience to master. Over the years I have even heard accountants suggest they are better than, or know more than Financial Planners and Finance Brokers....just because they are "Accountants". This is certainly not the case as all three professions are all consuming, complex and specialised professions in their own right. If anything, just as a Financial Planner needs to have specific accreditation's to advise on SMSF's and Age Care, a specialised accreditation in the area of Credit Advice might be a suitable work around, but an exemption simply because you hold a DFP or B.Bus(FP) or M(FP) will not provide with the skill set you need to navigate the nations credit and lending system.......that I can guarantee you.

Having re-registered recently with the TPB, as a Tax (financial) adviser, the TPB re-registration website is clunky & very time consuming. It took over an hour to upload information that could have been done in a few minutes. What a joke. It cost me more in time to do the upload, than it did in registration costs. This is why advisers insist on charging minimum ongoing fees - to cover time wasting inefficient red tape like this.

A very sensible recommendation from the FSC. Co-regulation provides no consumer benefit but increases the cost of advice. Further, we now have AFCA in force and the TPB didn't protect consumers of tax (financial) advice services in any case, only consumers of tax agent services.

I am sure this will change. This government has promised to reduce red tape.

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