FPA challenges TPB to properly define 'tax financial advice'


18 March 2021
| By Mike |
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The Financial Planning Association (FPA) has hit out at the Tax Practitioners Board (TPB) for failing to align the rules for tax financial advisers with the Financial Adviser Standards and Ethics Authority (FASEA) regime while failing to define what actually represents tax financial advice that falls outside the definition of financial advice.

In a strongly worded submission to the TPB the FPA said it was extremely disappointed “by the TPB’s reluctance to unconditionally accept the [Continuing Professional Education] CPE 1 completed for FASEA purposes as meeting the TPB CPE requirements for tax (financial) advisers (TFAs).

“The FPA notes that the TPB have mirrored many of the FASEA requirements in the proposed amendments to its CPE policy. However, as these proposals do not replicate in whole the higher FASEA requirements without conditions, it creates two mis-matched systems that will lead to confusion and more red tape for tax (financial) advisers,” the FPA said.

“Since the 11 February 2021 release of the Exposure Draft CPE Policy for TFAs for public consultation, the FPA has received feedback from numerous practitioner members stating that the TPB draft policy (for example):

  • Is confusing
  • Requires TFAs to undertake an additional 120 hours of CPE on top of the FASEA requirement, and
  • Does not align with the record keeping timeframes for FASEA CPE which will mean that TFAs will need to maintain two sets of records.”

It said that, most significantly, “practitioners are confused about:

  • What exact TFA services they provide that are not also personal financial advice services under the Corporations Act, and
  • Therefore, what topic areas of CPE are not captured under the FASEA requirements, through the individual’s licensee approved CPD Plan, that the TPB would expect a TFA to undertake.”

The FPA said it had to continually request that Treasury and the TPB provide clear examples of TFA services that fall outside the definition of personal financial advice since the proposed application of the Tax Agent Services Act to financial planners in 2008.

“Clear examples of services and circumstances in which a financial planner would be providing a tax (financial) advice service, but not personal financial advice, would help the profession identify the gaps in the CPE undertaken for FASEA purposes.”

“Without clear examples of these services, the TPB’s proposed CPE policy for TFAs is confusing and unnecessarily creates additional red tape for financial planners that will provide no extra benefit for consumers,” the FPA said. “Rather, it will drive up the cost of financial advice for Australians.”

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