Financial Advisers Will Need Tax Qualifications – TPB

Many advisers will likely need to undertake further study in order to continue to deliver financial advice, under proposed guidelines issued by the Tax Practitioners Board (TPB) last week.

Under changes to the Tax Agent Services Act (TASA), set to be introduced to Parliament in June 2013, financial advisers who provide tax advice in the course of their dealings with clients will be required to register with the TPB (see: Risk Advisers May Be Caught in Tax Net).

The TPB has subsequently proposed that in order to register as compliant with TASA, these advisers will need to complete an approved course in Australian tax law.

According to the TPB, in order for a course to be approved for ‘tax (financial product) advisers’, it will need to be:

• Of sufficient breadth to equip a tax (financial product) adviser to advise the public on the diverse range of tax issues
• The equivalent of one tertiary-level taxation law unit, covering key areas of taxation law such as basic tax concepts, capital gains tax, fringe benefits tax and superannuation
• Made up of a total of 100 – 130 hours of study

It is also expected that course participants would undertake some means of objective assessment, such as examinations or assignments.

The Board said it would only accept evidence of prior study if the adviser had completed a course containing the relevant content (outlined above), and:

• The component unit of study was completed fewer than 10 years from the date of the application for registration; or
• The component unit of study was completed more than 10 years from the date of the application for registration and the applicant can demonstrate an updating of those skills through work experience and continuing professional development.

Prior learning through practical experience (ie: learning in the workplace which has not been formally assessed) is unlikely to be recognised for registration purposes, the Board said.

Prior learning through practical experience is unlikely to be recognised

In addition to the completion of an approved course, advisers wishing to register with the TPB will also be required to demonstrate the equivalent of two years’ full time relevant experience in the preceding five years.

However, if the adviser holds a degree from a TPB approved tertiary institution in a discipline relevant to tax (financial product) advice, they need only prove 18 months’ full time experience. Advisers who are voting members of a recognised tax agent association will only need to complete 12 months’ full time experience.

The proposed education requirements are currently open for industry consultation. Stakeholders wishing to make a submission must do so by 21 May 2013. For more information, please click here to visit the TPB site.