Media Release

Agreement to regulate tax advice by financial planners a win for consumers

The Institute of Chartered Accountants in Australia (the Institute) has welcomed the principles underpinning the development of new regulatory arrangements for financial planners who provide tax advice as part of financial planning services.

The principles were agreed on 8 February 2011 in a landmark meeting between the Institute, the other professional accounting bodies, representatives of the financial planning industry and the Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon Bill Shorten MP.

“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,” said the Institute’s CEO, Graham Meyer.

“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,” Mr Meyer said.

The principles agreed on 8 February include a closer collaboration between Australian Securities and Investments Commission (ASIC) and the Tax Practitioners Board (TPB) on the regulation of financial planners. The objective is to retain ASIC as a ‘front of house’ regulator with the TPB setting the standards for education and training for all financial planners.

Licensed financial planners are regulated by ASIC and any tax related services they provide are currently outside the scope of the Tax Agent Services Regime, which came into effect in March 2010.

“While there is still a lot of detail to work through, this is a great outcome because it is another positive step in raising the bar for the quality of financial advisory and taxation services in Australia,” Mr Meyer said.

Article last Updated 5 July 2011