The Investment and Financial Services Association (IFSA) has called for full tax deductibility of all financial advice before a Parliamentary Joint Committee (PJC) inquiry into Australia's financial products and services.
"Maximising access to financial advice is integral to increasing incomes for working Australians. All fees for financial planning should be tax deductible to improve access to advice," IFSA chief executive John Brogden said at the inquiry held on Friday.
"Providing tax deductibility for all financial advice is essential in ensuring that investors are able to effectively exercise choice in how they pay for their advice - be it upfront or ongoing."
The Institute of Chartered Accountants in Australia (ICAA) has issued a comment in support of this recommendation.
"The fact that commission-based financial advice attracts a tax deduction, while advice given by fee-for-service advisers currently does not, is a distortion currently facing the industry," ICAA chief executive Graham Meyer said.
"Allowing deductibility for fee-for-service advice is a necessary step for securing greater trust between financial advisers and their clients. This contributes to the professionalism of the industry," he said.
Brogden said the financial services licensing process should also be reviewed to ensure licensees and their authorised representatives are appropriately resourced to offer a range of financial services and products.
"We support the entry level requirements, ongoing qualification and professional development of financial advisers over time. However, any reforms must ensure affordable access to financial advice for those who need it - particularly low income earners and young people," Brogden said.
IFSA also called on ASIC to become more pre-emptive when it comes to market misconduct.
"Industry has an important role to play in this area by alerting and assisting the regulator to what is happening in the marketplace," Brogden said.
"A stronger feedback loop between industry and the regulators will have the potential to improve the operation of the financial services system for the benefit of all stakeholders."
The PJC, which is chaired by Bernie Ripoll, will hold public hearings over the coming months in Sydney, Melbourne, Brisbane, Townsville and Cairns with a report and recommendations to be tabled in parliament on 23 November.
