FPA blasts TPB over lack of understanding
The Financial Planning Association (FPA) has criticised the Tax Practitioners Board (TPB) for its lack of understanding of the financial advice industry structure, highlighting its vast difference from the accounting industry.
The FPA made a submission to the Treasury’s June discussion paper - 'Proposed registration requirements for registered tax (financial) advisers’ - in which it highlighted the importance of understanding the structural differences between the financial planning industry and the tax agent industry.
The submission, which was prepared by FPA general manager for policy and conduct Dante De Gori, acknowledged the Treasury’s efforts to tie the TPB registration requirements to the financial planner licencing regime under the Corporation Act and the Australian Securities and Investments Commission (ASIC).
However, there are still many unanswered questions in relation to the registration requirements under the Tax Agents Services Act (TASA), including supervisor requirements and determining competency, according to the FPA.
“At this stage it is unclear as to who in a licensee needs to be registered with the TPB,” the submission read.
“The financial planning profession does not have the same operating/regulatory model as the accounting profession with a head partner responsible for sign-off.”
It is also unclear whether supervisors would be required to be located in each planning practice to oversee and sign off on Statements of Advice.
This, the FPA said, would not be practical across small or large financial planning practices, as it would require experienced financial planners to provide the mentoring and coaching.
“This could require licensees to employ additional skilled advisers competent to provide [mentoring], and even solely for the purpose of the supervision and monitoring requirements,” the submission read. “This would be a significant cost on all industry participants, particularly smaller licensees, and ultimately increase the cost of advice for consumers.
The FPA also used the discussion paper to once again express concerns on lack of coordination between the Treasury, TPB and ASIC regarding the education requirements, proposing a specific definition of the role played by the regulators, licensees and professional bodies.
“The FPA is concerned and unclear how the education requirements for ... financial advisers under the Tax Agent Services regime align with the Australian Government’s current national education framework, or how the proposals will impact the requirements of ASIC’s regulatory expectations
(currently under review in Consultation Paper 212 and Consultation Paper 153), and the vital role that professional bodies in particular, but also licensees, play in underpinning financial planner education,” it said.
“The FPA suggests a more considered strategic approach is needed to ensure regulatory efficiency, greater confidence in financial planner competence and a closer alignment to consumer protection.”
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