John Brogden

The Financial Services Council is advocating for the establishment of a statutory, independent, Advice Competency Standards Board (ACSB) for financial advisers to rebuild the trust of consumers in financial advice, John Brogden, CEO of the FSC said yesterday.

“The advice industry needs an external, independent governing body,” Mr Brogden said. “The best way to regain trust is to have an independent statutory body in control of education and  professional standards.”

“Self-regulation is no longer a credible option for establishing higher standards,” he said. “We have recommended to the Parliamentary Joint Committee inquiry into adviser competency and the Murray Review that an independent body be established to oversee adviser competency standards, education and professional conduct.”

“It is critical that the industry redefines itself through robust oversight and high competency standards to rebuild the trust and confidence of consumers so more Australians seek financial advice.”

“Significantly improved adviser education, increased ASIC powers and greater disclosure of experience and ownership are needed to increase public confidence in financial advice.”

The ACSB would replace current low entry points such as RG 146. The Board would comprise key industry stakeholders such as ASIC and the Tax Practitioners Board and would have industry representation determined by the Minister.

Mr Brogden also said: “The ACSB will be the point of integration for regulation which is fragmented and cuts across the Tax Agents Services Act and the Corporations Act.”

“Under this model, advisers will have robust competency and professional standards to complement their legal duties. This will end confusion and increase trust and confidence in the industry,” Mr Brogden said.

Read the FSC’s submission here to the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into proposals to lift the professional, ethical and education standards in the financial services industry.

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Financial advisers will continue to be licensed (or authorised under an Australian financial services licensee) by ASIC and adviser obligations under the Corporations Act 2001 (Corporations Act) remain unchanged.

Until 31 December 2015, AFS licensees and their authorised representatives who provide a tax (financial) service can either:

• notify the TPB to become registered as a tax (financial) adviser, or
• use a relevant disclaimer when they provide tax (financial) advice services for a fee or other reward.

This option is the first phase of the progressive introduction of registration of tax (financial) advisers that will continue over the next three years.

Commissioner Greg Tanzer said, ‘ASIC and the TPB have been working cooperatively for many months to ensure the smooth transition of the new regulatory regime.

‘This has included sharing information from ASIC registers with the TPB to cut red tape and streamline the tax (financial) adviser registration process.’

ASIC and the TPB will continue to work together as the regime is implemented.

More information can be found on the Financial advisers providing tax advice page of the ASIC website and TPB website.

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Jordan George

Treasury’s draft regulations specifying the registration requirements for tax (financial) advisors to register with the Tax Practitioners Board (TPB) is a positive step for the advisory industry, says the SMSF Professionals’ Association of Australia (SPAA).

SPAA’s Senior Manager, Technical & Policy, Jordan George, says the draft regulations propose appropriate registration requirements for financial advisors that want to register with the TPB to provide tax advice that is integral to financial advice.

“The draft regulations allow voting members of a recognised professional association with six years’ relevant experience to register as a tax (financial) advisor without further need to complete TPB-approved courses in tax and commercial law.

“As a recognised tax agent association, we would expect the TPB to accredit SPAA as a recognised tax (financial) advisor association and the association will make an application to the TPB soon.

“It means SPAA SSAs that have six years’ relevant experience in providing tax (financial) advice services will not need to undertake TPB-approved courses in tax or commercial law.

“This is a real bonus for SPAA members who have made the effort to undertake professional development and training in order to be rightly recognised as industry leaders,” says George.

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This latest announcement as a recognised tax agent association by the Tax Practitioners Board (TPB) means that membership of the FPA will fulfil requirements for registration of members if they meet the relevant fit and proper person, as well as experience requirements.

Members who are already a Registered Tax Agent or Registered BAS Agent will be able to retain this status as a member of the FPA.

Mark Rantall, CEO of the FPA said:
“The announcement from the Tax Practitioners Board on the FPA being formally recognised as a Tax Agent Association will prove to be a great benefit for our members and provides further recognition of the FPA as a professional body”.

The TPB has recognised, through this accreditation, that the FPA has rules in the Code of Professional Practice and its requisite disciplinary procedures and processes that meet the TPB’s requirements for recognition as an association and that the FPA has appropriate professional and ethical standards for its members.

“This is another big win for the FPA and its members. FPA members who sign to the Code are committing themselves to provide Australians with the highest ethical standards of advice. The FPA will continue to raise professional standards for Australians receiving financial advice and those providing it. 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,” continued Rantall.

Separately, the FPA has confirmed that it has lodged its Code of Professional Practice for approval to ASIC on the 16th February 2012, previous to FOFA being finalised in parliament and ahead of any other industry body.

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