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Financial planners who provide advice about tax should not be exempt from the new Tax Agent Services Act, the National Institute of Accountants (NIA) has argued.
The new Tax Agent Services Act came into effect on March 1, and the Financial Planning Association has been lobbying to ensure planners aren’t caught under the regime. But NIA chief executive Andrew Conway believes a failure to include financial planners under the Act will undermine the safeguards the Act seeks to provide to consumers.
Conway said it is “absurd” that financial planners are seeking to be exempt from the new regime.
“The law is clear; if you provide advice that relates to the obligations or entitlements of a person under tax law, you are required to be registered and covered by the Act,” Conway said.
“ASIC stipulates that tax is a core competency of financial planners under RG146,” he said, pointing to the requirement for planners to have knowledge of the Australian tax system, relevant tax law and the tax impact on certain financial products.
A key part of the new Tax Agent Services Act is the requirement for tax agents to hold a formal qualification, such as an advanced diploma or bachelor’s degree as a minimum, while the study of Australian company and taxation law is also mandatory. Conway said this appears to be a major sticking point for some sectors of the financial planning community.
“It seems those representing the financial planners are concerned a large portion of the profession will not qualify under the Act’s education requirements,” Conway said.
“Many bookkeepers who do not have these qualifications are returning to study to meet these requirements and the NIA believes that the same should continue to apply for financial planners.”
Conway said the NIA was in continuing discussions with Assistant Treasurer Nick Sherry to ensure planners are not made exempt from the regime.
“The legislation is designed to remove rogues from the industry. Creating exemptions from the law will undermine the certainty that this Act provides to the community,” Conway said.
