In its submission to Treasury’s review of the TPB, the FSC said the TPB was a largely invisible body where consumers were concerned, and that having advisers registered through ASIC with AFCA as their primary dispute-handling body would be simpler and more efficient for all concerned.
“Consumers are largely unaware of their rights of using a registered tax professional, nor of the existence of the TPB, with the TPB agreeing that they need to increase their own visibility,” the council said.
“We therefore query the utility of financial advisers having to be registered under the TPB as well as the Financial Adviser Register.”
The FSC further pointed out that consumer protection provisions provided to consumers by the TPB were limited to tax or BAS agents.
“There is no protection against losses incurred by consumers as a result of the provision of a tax (financial) advice service, as these are dealt with by AFCA,” the FSC said.
“Therefore, there is no material benefit for consumers by the continuation of the requirement for financial advisers to be registered as a tax financial adviser.”
The FSC proposed simplifying the regulatory regime so that those giving tax advice were registered with the TPB and those giving financial advice with ASIC, but it said granting exemptions for “incidental” advice would not give adequate consumer protection.
“Under the previous accountants’ exemption, the definition of ‘incidental’ was broad, meaning the exemption actually resulted in a substantial amount of financial advice that was not regulated in line with other types of financial advice,” the council said.
“Very high conduct and consumer obligations are imposed on financial advice providers which serve to protect consumers. These obligations and safeguards are not provided to consumers if the limited licensing regime is removed and [the accountants’ exemption] is implemented.”