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.
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.