Financial Planning Association CEO Mark Rantall says he is disappointed with the Parliamentary Joint Committee (PJC) on Corporations and Financial Services recommendation that government proceed with amendments to the Tax Agent Services Act (TASA) despite the industry making a “strong case” for deferring the reforms.
Rantall told Professional Planner that the PJC had seemingly ignored industry recommendations and it now appears that only an eleventh hour decision to extend the present exemption can stave off the new registration requirements.
“The FPA stands by its recommendation to provide a 12-month extension of the exemption to allow for the negotiation and implementation of what are wide-ranging reforms,” he said.
“We call on the government to extend the exemption in order for the significant detail of this legislative change to be worked through.
“We believe, as an example, the regulatory requirement issued by Treasury today for a higher-level study of commercial law, is excessive when added to tax law course.
“A 12-month extension of the exemption is appropriate whilst we continue to work with Treasury, ASIC and the Tax Practitioners Board to finalise this legislation.”
Havoc for financial advisers
The Coalition has suggested deferring the proposed changes by 12 months until June 30 2014 or extending the current carve-out by 12 months.
John Brogden, CEO of the Financial Services Council, echoed Rantall’s frustration, describing the PJC report on TASA as “inadequate”.
The FSC will push ahead with attempts to have the legislation amended in the Parliament by the Coalition and independents.
“The PJC recommends no changes to the legislation at all,” said Brogden. “This is despite very clear evidence from the FSC, AFA and FPA that the TASA legislation will create havoc for financial advisers.”
The FSC has also advocated for ASIC to amend RG175 on Best Interest Duty to enable advice providers to comply with the Best Interest Duty safe harbor requirement in TASA. It argues that he best interest duty requirements under TASA and FoFA are currently conflicting.
Structured consultation process
The Association of Financial Advisers (AFA) said it was pleased that the majority report has at least recognised that it is impossible to change the current disclosure by July 1 and has recommended a deferral of this obligation for 6 months.
“However, we are disappointed that the majority report does not recognise the problem with the definition of tax (financial) advice services, and we do not accept the validity of the argument for this, that the industry proposed definition would create uncertainty about the role of a financial advisers and that it may interfere with ASIC’s administration of the Corporations Act,” said CEO Brad Fox.
“Whilst a 6-month delay would be beneficial, given the upcoming election, this would be insufficient time to adequately address the other issues with the legislation.
“We firmly believe that the best outcome is for the legislation to be subject to further consultation and reintroduced following a structured consultation process.”
This is the sort of issue our industry body should be focused on.
Not whether we are called advisers, planners or whatever.