Not everyone is supportive of the delay to the proposed Tax Agent Services Act (TASA) reforms, as the legislation heads to a Parliamentary Committee for review this week.
The three major Australian accounting bodies have issued statements accusing financial advice bodies of standing in the way of provisions which would lift the professional standards of financial planners. The comments come in response to the House of Representatives’ decision to send tax reform legislation to the Parliamentary Joint Committee for Corporations and Financial Services (PJC) for review (see: Government Grants TASA Reprieve).
The decision to refer the legislation was met with grateful support by both the Financial Planning Association (FPA) and Association of Financial Advisers (AFA). In contrast, the Institute of Chartered Accountants (ICAA), CPA Australia and the Institute of Public Accountants (IPA) have labelled the move counter-productive and a missed opportunity.
CPA Australia’s Head of Policy, Paul Drum, said the amendments proposed in the legislation were designed to put in place appropriate protections for consumers dealing with financial advisers.
Parliament’s decision means that there will continue to be shortcomings in the standards that apply to the provision of tax advice from financial planners
“Consumers deserve to have access to the highest standards of professional advice from financial planners, which is what this new regulatory framework is aimed at delivering. Parliament’s decision means that there will continue to be shortcomings in the standards that apply to the provision of tax advice from financial planners,” he said.
Prior to the decision to send the legislation for review, IPA CEO, Andrew Conway, said the group fundamentally believed that anyone providing tax advice should do so to the same professional and ethical standards.
“The fact that the financial services industry are seeking to defer the introduction of the new regulatory framework puts the public interest at risk.”
Advisers took to social media to argue the contrary, with the majority saying existing regulation, overseen by the Australian Securities and Investments Commission (ASIC), provided appropriate consumer protection.
Both sides of politics have also weighed in on the debate. Assistant Treasurer, David Bradbury, who tabled the Bill in Parliament earlier this month, accused the Coalition of abandoning consumer protection reforms.
“Millions of Australians rely on the advice provided by their financial advisers on tax and investment decisions.
“Consumers deserve to have confidence that there is appropriate accountability and transparency around the tax advice that they receive from financial advisers.
“It is heartbreaking to hear about Australians who have lost money on the basis of incorrect advice from their financial adviser,” Mr Bradbury said.
The Coalition claimed victory on the move, and said it would ensure proper consultation between industry and the Government.
“Unfortunately, this is not the first time the Gillard Government has desperately tried to avoid proper process on contentious legislation,” said Senator Mathias Cormann in a statement to the media.
“Under pressure from the Coalition, Assistant Treasurer David Bradbury has been forced to see sense – albeit at the last possible moment.
“Ensuring good process in relation to major policy changes like this should not be this hard.”
The reforms will be discussed at a public hearing of the PJC in Sydney this week.
Bradbury I would love to see the figures on this “heartbreaking”. How many people lose money due to ineptitude of so many of accounants who retrospectively complete tax returns WITHOUT ANY ADVICE!
And if bank owned dealer groups cease handing out full planning licences to accountants without ANY any planning qualifications then Conways “professional and ethical standards” rubbish may actually mean something. Unfortunately financial planners are receiving concerted attacks from self serving Govt, unions, accounants, banks (under the guise of FSC) etc. none of which will do anything to protect clients from conflicted advice.
So… they will put it in place… But does anyone know what qualifications an adviser is supposed to have??? Just havent seen any discussion on the actual requirements just lots of articles about people whining…
How could i even begin to meet the requirements when noone has told me what they are….???
Mr Andrew Conway should start to realize that the average qualified financial planner has either a Diploma or Advanced Diploma which is also the the qualification need to join the IPA. Perhaps he should start trying to work with the Financial Planning Industry instead of looking down at them all the time, and instead of pointing out all the problems, get involved and help solve the issues. You never know, this might help the IPA from being lost to obscurity again and avoid another name change to re-vitalize itself.
Also, I find it some what comical that the the largest accounting bodies in Australia can’t agree on nearly any matter related to their field of expertise but can all agree on a matter that directly impacts their ability to justify / charge more for their services under the guise of public interest.
Do you think the average Australian would like to know that tax returns are no longer being done by an Australian but the “medial” task has been outsourced to someone in Malaysia, Indonesia or some other part of Asia help with an Accounting firms profitability. Just interesting how people’s points of view change dependent on which side of the fence they are getting paid from….I mean sitting.
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