Dantre DeGori – General Manager, Policy & Government Relations – FPA

The Financial Planning Association (FPA) submission to the federal budget 2013-14 has outlined key recommendations to improve access to financial advice to all Australians, with a focus on the ageing population. 

1. The preparation of an initial financial plan, and ongoing management fees or annual retainer fees, expressly stated to be tax deductible.
2. To immediately increase the $25,000 cap to $50,000 for all Australians over 50 years of age, regardless of their superannuation account balance.
3. A more flexible and pragmatic measure in dealing with excess concessional contributions caps.  

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This decision will extend for one year the current exemption, which expires on 30 June 2012 and will allow for a smooth transition to the new regulatory regime, which will bring taxation advice provided in the context of financial product advice within the scope of the Tax Agent Services Act 2009.

The decision to grant an extension followed consultation with representatives from the financial planning, tax and accounting bodies, the Tax Practitioners Board and the Australian Securities and Investments Commission.

Dante DeGori, General Manager Policy and Government Relations at the FPA said:

“The FPA welcomes today’s announcement from the Assistant Treasurer. We believe this extension is a sensible approach that will allow for the government to have all details in place before financial planners are expected to transition to the tax agent services regime.”

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Dante DeGori, General Manager Policy and Government Relations for the FPA and responsible for the FPA submission, has suggested key budgetary public policy initiatives required to meet the Government’s current reform agendas.

“The FPA believes there are specific initiatives that the government must undertake in order to improve access to financial advice for those Australians who are most in need of assistance in managing their financial affairs. These recommendations will encourage a savings culture for consumers; remove inconsistencies in the tax system; and improve Australian’s retirement preparedness, in turn reducing reliance on the social security system.”

The three key recommendations the FPA has made are:

1. A tax deduction to be available for the cost of upfront financial planning fees
2. The removal of the age restriction (currently 75 where the work-test is satisfied) for the purposes of making concessional or non-concessional contributions
3. Changes to the concessional contribution caps to ensure more Australians are able to self-fund their retirement.

“The FPA has also listened to our members who are helping consumers reach their financial goals every day. We believe adopting these recommendations would effectively deliver good social outcomes by making financial advice more accessible and improving the long-term financial security of Australians. The FPA thanks Government and Treasury for the opportunity to contribute to the pre-budget process. We would welcome the opportunity to discuss these issues further with the Government,” said Mr DeGori.

Submissions to the federal budget 2012-13 submissions closed on Friday 27 January 2012 and the final budget is expected to be released on budget night, Tuesday 8 May 2012.

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At the hearing, Dante DeGori, General Manager Policy and Government relations of the FPA, reiterated that the FPA supports the majority of the FoFA reforms and outlining the changes they believe should be implemented in the best interest of the consumer.

“The FPA continues to support the majority of the FoFA reforms, the intent behind the reforms, and the importance of improving transparency of, and access to, financial advice for all Australians. In order to ensure the reforms are implemented accurately, while ensuring the reforms are workable and facilitate a vibrant industry to provide quality advice going forward, we would recommend that the government announces a one year transition timeframe. We believe this would allow all financial planners the time needed to implement these reforms in a transparent and efficient way,” De Gori said.

“The FPA and our members continue to strive for a financial planning profession that serves the community and provides Australians with the best possible financial advice and support. These reforms are integral to the financial future of all Australians, therefore we want to ensure that discussions around and the implementation of the reforms are not rushed, potentially resulting in unintended consequences.”

As per the Parliamentary Joint Committee meeting in January, the FPA again stated that the original intent of the FoFA reforms should be adhered to, ensuring that:

1. Financial advice must be in the client’s best interests – distortions to remuneration, which misalign the best interests of the client and the adviser, should be minimised
2. In minimising these distortions, financial advice should not be put out of reach of those who would benefit from it. The FPA, which represents nearly 10,000 of Australia’s financial planners, has been an active advocate both for its members and for consumers throughout the FoFA debate, and has led the way on many proposed reforms.

The FPA released the remuneration policy on banning investment commissions to members in 2009 and it is due to commence on 1 July 2012; the number one principle in the FPA Code of Professional Practice requires members to place the interests of their clients ahead of their own; and FPA practitioner members all work to higher professional standards than required by law.

The Senate Economics Legislative Committee, Chaired by Senator Mark Bishop is holding public hearings yesterday and today to collate and examine submissions from prominent industry stakeholders about the FoFA Bills as tabled in parliament late last year.

The FPA was represented by Dante De Gori, General Manager of Policy and Government Relations and Dr Deen Sanders, Chief Professional Officer and architect of the FPA Code of Professional Practice.

FPA CEO Mark Rantall has been representing the financial planning profession at the first sitting of the newly announced Super Roundtable chaired by the Hon Bill Shorten in Canberra today discussing the proposed changes to the concessional contributions caps as a result of the transitional arrangements ending on 30 June 2012 and how it can logistically work for Australians moving forward.

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Dante DeGori, General Manager Policy and Government Relations at the FPA said:

“The FPA supports the Productivity Commission inquiry into the appointment of superannuation default funds into awards.

“We believe that any process to appoint a fund should be dealt with professionally via a transparent set of criteria.

“This latest announcement by the government encourages an even playing field for all superfunds, industry and retail alike.  The FPA would support any move taken by the Government as a result of the findings to ensure greater competition and better outcomes for consumers.

“As a leading professional body in financial services, the FPA and our members continue to strive to provide qualified accessible financial advice that is in the best interest for all Australians.

“The FPA looks forward to the results of the review later on in the year and will assist where needed.”

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