Sarah Abood

The Financial Planning Association has formally called on the next parliament to add a comprehensive tax deduction for the provision of financial advice among other items ahead of the election on 21 May.

The association released its 2022 Federal Election Platform which includes its stance on issues including regulatory reform, education requirements, the ASIC funding model, the compensation scheme of last resort, and finfluencers.

Headlining the report, though, is a request to extend the tax deductibility of advice from ongoing advice only to include upfront advice fees as well.

“All financial advice should have tax deductible status,” the platform stated. “This should be regardless of whatever stage in the financial advice process it is provided, and whether it directly relates to the creation of investment income.”

In a media release FPA chief executive Sarah Abood said the the association is calling for sensible measures to improve the affordability and accessibility of financial advice, expressing support for the advice review.

“A number of matters of great importance to our profession will be addressed through these important evaluations [the advice review and the ALRC review on the Corporations Act] and we welcome the current bipartisan approach and support for their delivery,” Abood stated.

ASIC levy

In relation to Treasury’s review of ASIC’s industry funding model, the FPA wants the regulator to report its findings before the freeze on ASIC levies charged for personal advice to retail clients expires.

The freeze was announced last August which would see a reversion to the 2019 level of a flat fee of $1,500 per license plus a graduated component of $3,138 per adviser, but would last only two years.

“As many practitioners are sole traders or work in small and medium-sized practices, their ability to absorb any additional regulatory costs or burdens is extremely limited,” the document stated. “To provide certainty to the profession and provide adequate notice of any change, which may require planning for business models to adapt, this review should be completed prior to the expiration of the ASIC levy freeze.”

Last resort for the CSLR

The FPA said the compensation scheme’s design and implementation should ensure consumers are covered for the “full range of matters” considered by AFCA including managed investment schemes (MISs), and the government should bear the costs of establishment and any legacy claims relating to the scheme.

The FPA is part of a coalition of 15 industry and consumer groups that wanted to include MISs, which has support from Labor but not the Liberals.

Because of Labor’s dissent to the bill it was not passed during the final sitting of Parliament before the election, although it opens the door for MISs to be included in a new bill should Labor hold the balance of power.