Avoiding regulatory duplication in new tax advice regime

Industry SuperFunds are increasingly providing their members with cost-effective limited financial advice, so any new regulatory regime covering this type of advice must not impose unnecessary duplication or costs.

Industry SuperFunds use a variety of business models to deliver limited or modular pieces of financial advice to enable members to gain more from their product offerings and improve their retirement benefits. This advice covers topics such as adequacy of retirement savings, member investment choice, fund insurance options and making additional contributions. Often these topics will involve consideration of the tax implications of these decisions.

The Gillard Government has introduced new requirements for providers of tax advice services, which would capture AFSL holders who provide tax advice incidental to the provision of financial advice. Late last year, the Government consulted on the way in which AFSL holders would be regulated by the new regime for providers of tax advice services, and proposed 2 options.

The first option proposes oversight of financial advisers providing tax-related advice by the Tax Practitioners Board, which is responsible for regulating tax practitioners such as accountants. This option would introduce yet another regulator into the super industry.

Option 2 involves allowing one of the current super industry regulators (ASIC) to supervise the provision of tax-related advice by super funds.

Industry Super Network (ISN) believes Option 1 would impose a significant additional compliance burden on super funds and duplicate existing regulatory requirements. Even with streamlined licensing processes, the compliance requirements and regulatory burden on funds is likely to see fund costs increase. Given this, ISN is strongly supporting Option 2 as the better of the two options proposed for the new regulatory regime. ISN believes ASIC would provide comparable supervision to the Tax Practitioners Board without duplicating existing requirements on funds or increasing the cost of providing limited advice to fund members.

Click to read ISN’s submission on the proposed Tax Agent Services (TAS) regime for AFSL holders: http://industrysupernetwork.com/category/resources/submissions

Regulation of Tax Agent Services provided by Financial Planners

ISN’s submission on the proposed Tax Agent Services (TAS) regime for AFSL holders.

The Government has sought the views of interested parties on 2 options for regulating the provision of incidental tax agent services (TAS) regime to AFSL holders.

Industry super funds are increasingly involved in the provision of financial advice services to their members. While some of this advice is provided in a traditional face to face setting, funds are expanding their delivery of transactional, limited advice to existing members through more efficient channels such as telephone and web based advice services.
ISN strongly supports Option 2 as a preferable means of applying the TAS regime to financial planners involved in providing incidental tax advice in the course of advising their members.