Last week, the government released the final report and its response to the review of the Tax Practitioners Board.
The review looked at the effectiveness of the TPB and the Tax Agent Services Act 2009 to ensure tax agent services are provided to the public in accordance with appropriate professional and ethical standards.
One of the recommendations suggested in the final report was for the government to initiate a specific review of what advice accountants can and cannot give in respect of superannuation and which accountants that might apply to.
Such a review, it said, could be undertaken by the Productivity Commission.
“Having recommended the regulatory burden on tax (financial) advisers is to be reduced, the review believes it is reasonable that a similar level playing field should be considered for accountants,” the report stated.
The report explained that the removal of the accountants’ exemption had placed accountants in an impractical situation where, as trusted advisers, they were expected by their clients to be able to provide advice relating to SMSFs but cannot unless they have an AFSL.
“Comments have recently been made by tax practitioners at a Tax Forum that advice on establishing an SMSF is advice concerning a structure in the same vein as advice on establishing a company or trust,” it said.
“At this point, no financial product advice is being provided. Clients may be confused as to why their accountant can give advice on all business and investment structures but not an SMSF.”
While the report noted that accountants can hold a limited AFSL which allows for the provision of some advice relating to superannuation, this is also impractical and results in the accountants incurring additional fees in addition to those incurred by registering with the TPB.
In its response to the final report, the government said that it supports the recommendation by the review in principle.
“The government will review this issue as part of recommendation 2.3 of the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,” it stated.
Recommendation 2.3 of the royal commission recommended that the government review the effectiveness of measures implemented to improve the quality of financial advice.
In a public statement, Assistant Treasurer Michael Sukkar said increasing the independence of the TPB and reducing red tape for the tax profession are two of the government’s main objectives.
“Undertaking additional consultation prior to implementing some of the review recommendations will allow the government to further develop options, ensuring the best outcome for tax professionals and taxpayers who rely on their services,” Mr Sukkar said.
Chartered Accountants Australia and New Zealand leader, financial advice, Bronny Speed recently stated that she was optimistic about the government addressing some of the difficulties faced by accountants in terms of strategic advice for SMSF clients.
“The industry has had several sessions with Senator Hume, and she’s pretty keen on the concept of single-issue advice or single-topic advice. So, it’s gaining momentum, so I’m really hoping we’ll be able to do those basic things without a licence,” Ms Speed said.
The only issue with this is that they haven’t reduced the obligations for tax (financial) advisers, they have simply stated it should whilst increasing the obligations later in the week. ASIC are a corrupt joke.
An exemption wasn’t needed when there wasn’t the AFS Act. With the Act we got a carve out. Then the carve out was removed because we accountants didn’t know what we were doing. Now its being reconsidered to be reinstated. The solution, get rid of the AFS Act – its been the source of all problems. And we all know who doesn’t know what they are doing – the ASIC.