Shorten confirms planner/tax compromise

The Australian Securities and Investments Commission (ASIC) will work with the Tax Practitioners Board to oversee the delivery of tax advice by financial planners under a new regime outlined by the Federal Government.

In a move that gained the endorsement of the Financial Planning Association (FPA), the Assistant Treasurer and Minister for Financial Planning, Bill Shorten (pictured), confirmed that ASIC would be “the key agency for interacting with financial planners”.

However, he made clear that the regulator would be “supported by a strong and collaborative arrangement with the Tax Practitioners Board".

The confirmation of the continued primacy of ASIC was immediately welcomed by the chief executive of the FPA, Mark Rantall, who said the organisation had fought hard for ASIC to remain the sole regulator of financial planners.

He said that contrary to initial press reports, financial planners would not be forced to adhere to standards set by the Tax Practitioners Board but, rather, competency levels would be established by ASIC in consultation with the board.

Nonetheless, he said the FPA believed dual regulation of tax and financial planning would add cost, confusion and complexity for consumers.

The National Institute of Accountants (NIA) described the regime outlined by Shorten as “an acceptable compromise”.

NIA chief executive Andrew Conway said his organisation was working closely with the Government “to ensure that financial planners are protected in relation to tax services provided as part of financial planning services”.

“It’s been a bugbear for accountants that licensed financial planners have been excluded form the Tax Agent Services Regime since it came into operation in March 2010,” he said.