- Each would have the same positive impact (43%)
- Tax deductible life insurance premiums (33%)
- Tax deductible financial advice (21%)
- Not sure (3%)
Recent calls on the Federal Government to consider allowing tax deductions on life insurance premiums and financial advice have prompted our latest poll. If the game-changing opportunity does arise in future for consumers to access tax deductions for life insurance products and/or for the provision of financial advice, we are asking which initiative would have the most positive impact on your advice practice.
A future tax deduction of 30% on life insurance premiums has been promoted recently by SR2 Health (See: Call for Radical Rethink on Underinsurance), while the IPA says a tax deduction on financial advice would be of immense benefit to all consumers seeking financial advice.
The nature of each advice practice proposition would presumably determine which of these two initiatives would have the most positive impact on the practice (and therefore the practice’s clients), but is it more involved than this?
Tax deductible life insurance premiums would probably deliver the most beneficial impact for risk-focused advice practices. But could the greatest value actually be felt by accounting firms, for example, for whom this could represent an entirely new opportunity to build the value of their practice and deliver a more comprehensive service for all of their clients?
Or, would most, if not all, advice practices experience greater long-term value from the prospect of having all clients able to claim a tax deduction on the cost of the financial advice they receive, especially in an environment where most advice in future, other than for life insurance solutions, will be delivered under a ‘fee for service’ model? The argument here is that tax deductibility of financial advice “… carries a cost which will be significantly outweighed by the longer-term benefits of the assistance provided to taxpayers as they plan for independent retirement…” (see: Renewed Call for Tax Deductible Financial Advice).
Which tax deduction for your clients would have the greatest positive impact on your advice business? And would the answer also be the same in terms of the positive impact for your client base? Australia currently suffers from a chronic underinsurance dilemma, and a national community for which it is generally accepted that only one in five people access qualified financial advice. Which issue takes precedence for you? Tell us what you think…
