While the Financial Planning Association (FPA) is generally happy with the Federal Budget, chief executive Jo-Anne Bloch would like to see financial planning advice fees made tax deductible.
According to Bloch, this would encourage more people to seek professional financial advice.
In addressing FPA members in the association’s monthly publication, Bloch explained tax deductibility only applied to expenses incurred generating income.
“That means fees for an initial financial plan are not tax deductible because they are supposedly of a capital nature,” she said.
“But the glaring anomaly is that payment via commission does attract a tax deduction because it is seen to relate to income generation.”
Bloch said the Australian Taxation Office (ATO) was concerned such a move would open the floodgates for other professionals to demand similar treatment, however, she said “financial planners are different in that we are about wealth creation and retirement savings”.
“Such a move would support the Government’s significant initiatives to ensure Australians do pay attention to their financial needs.”
Prior lobbying of government and the ATO has raised interest from industry associations, regulators and Labor.
As the issue is a key priority for the FPA, Bloch said lobbying on the matter would continue.