The Minister for Financial Services and Superannuation Bill Shorten has announced the basis for the new regulatory regime that will govern financial planners who provide tax advice to their clients.
The new arrangement concentrates on consumer protection and will involve the development of competency standards that practitioners will have to conform with in an effort to ensure a defined level of quality for advice.
To minimise duplication and administrative obstacles, ASIC will be retained as the regulator and will be assisted by the Tax Practitioners Board in developing the new competency standards and in implementing the new framework in an efficient manner.
The approach has been welcomed by a number of professional bodies including the Institute of Chartered Accountants in Australia (ICAA), which met with Shorten to formulate the principles.
"We all agreed that the only way to ensure consistent monitoring of tax advice to Australians, equal access to consumer safeguards and improved public confidence in taxation services, is to set and apply the same rules for anyone involved in the delivery of taxation services to the public," ICAA chief executive Graham Meyer said.
"This is a watershed moment for policymaking in financial advisory services. It is not often that you can put all key stakeholders in a room together and achieve an outcome that is genuinely in the best interests of consumers. This is an encouraging result for the government and one that should set a precedent for future policy decisions," he said.
The FPA, who were also involved in discussions with the government on this matter, welcomed the principles and reiterated it would not have supported a framework that imposed an additional licensing scheme on financial planners.
The National Institute of Accountants (NIA) was also in favour of the chosen approach.
"We have come a long way since the Government began the consultation process. While we recognise that the financial planners ideally should have been registered under the Tax Agents Services Act Regime the current proposal will achieve the similar outcome without the duplication of resources," NIA chief executive Andrew Conway said.
