It suggested allowing accountants to provide incidental financial advice as well as allowing financial advisers to provide incidental tax advice while not having to be registered with the TPB.
“This option would bring back the accountants’ exemption and allow accountants to provide basic SMSF advice and services without having to operate in the AFSL environment,” Treasury’s discussion paper said.
However, in its joint submission in response to the discussion paper, both Chartered Accountants Australia and New Zealand and CPA Australia have chosen not to support the option.
“Tax is a key consideration for the majority of financial planning strategies. It is not incidental, it is material to the advice and recommendations,” the joint submission said.
“Further, the accountants’ exemption only permitted the recommendation to establish or wind up an interest in an SMSF. It was so limited that it did not even permit a recommendation to not establish an SMSF.
“Restoring such a limited exemption is not going to address the need to enable affordable, accessible and quality advice by trusted advisers.”
Conversely, the Institute of Public Accountants and the Tax Institute believe a return of the accountants’ exemption should be explored.
The IPA believes a return of the exemption would address a current market gap where taxpayers are not adequately serviced, and help fulfil the objective of the Future of Financial Advice (FoFA) reforms, which was to provide affordable and accessible financial advice to Australian consumers.
“The current regulatory environment has created artificial, impractical boundaries which hinder the ability of both groups to have broader-ranging discussions with their clients,” the IPA said.
“Appropriately qualified accountants are well equipped to deal with such advice, without the need to apply for an AFSL or limited AFSL.”
Specifically, the Tax Institute believes reintroducing a limited form of the accountants’ exemption should be considered.
The Tax Institute believes a registered tax agent who does not have an AFSL should be allowed to structure arrangements to make a contribution, receive a pension or exit an SMSF including setting up and closing down the SMSF; to recommend winding up of an SMSF in specific circumstances; commence an income stream and take a lump sum from an SMSF; make contributions to an SMSF; and advise on the application of the small business CGT concessions as they relate to making a contribution to an SMSF.
Wholesale review needed
As an interim solution, both CA ANZ and CPA believe ASIC and the TPB should operate as co-regulators of financial advisers and that the TPB is responsible for the imposition of sanctions for tax-related matters.
Instead, both major accounting bodies want Treasury to conduct a wholesale review of the current financial advice framework, citing “years of layered regulatory reforms”.
“A wholesale review of the current regulatory framework is needed to address the regulatory complexity caused by years of layered regulatory reforms, without any appropriate review to ensure these reforms are meeting their policy intent,” the submission said.
“For example, the objective of the Future of Financial Advice (FoFA) reforms was to ensure advice is in the best interests of clients and advice should not be put out of reach of those who would benefit from it.
“The objective of the review should be to identify policy changes needed to ensure that consumers can access quality affordable advice from their choice of trusted adviser.”
I00 per cent with you Unhappy Jack. I am FCA and regret the day i ever aspired to be CA all those years ago. They have no interest in supporting members in public practice. This is just another example in a long sorry line unfortunately. Virtually very accountant i have ever spoken to wants the Accountants Exemption back and for these so called Professional Bodies to not even ask the members is outrageous. A pox on both their houses!
I am a CPA member who sat through several meetings where members lambasted CPA representatives for failing to look after its members and not fight to retain the Limited Licence. Now we find that those same nitwits are arguing against it being reinstated. How about you ask your members opinions and get out of your ivory tower a bit more often.
The scope of the ‘exemption’ was tiny. Just putting it back misses the source problem.
The real problem for accountants is that their clients DO NOT want to pay for ‘licensed advice’.
Yes. It appears there is no shortage of people who want something for nothing.
I agree with you ‘unhappy jack’ our professional bodies have lost the plot and are not interested in looking after their members, they spend more time in virtue signalling and climate change BS than doing what they are supposed to do. If a poll was taken from its members they would soon realise that if they do not look after us they will lose members and become redundant.
I agree with you Unhappy Jack. I actually emailed the Institute and asked them when they were going to ask for their members’ opinion – but no response on that one. How can a professional body represent their members when they don’t know what their members want. Looks like maybe someone advising the Institute may be feathering their own nest.
The Tax Institute views are sound and should be an important part of the review.
I am a CA and I am so very disappointed that my professional body recommended against the accountants exemption. Right from the start they showed no interest in fighting to retain it a few years ago.
I am sure that if they surveyed their members more rather than less would desire the return of the exemption – perhaps with some fine tuning!