The independent review of the Tax Practitioners Board has now called for the government to reduce the regulatory burden on accountants and clarify what advice they can and cannot give in respect of superannuation.
The wide-ranging review explored the issue of the accountants’ exemption that was removed in 2016, noting that it placed accountants in an “impractical situation where, as trusted advisers, they were expected by their clients to be able to provide advice relating to SMSFs but could not unless they held an AFSL”.
“Comments have recently been made by tax practitioners at a Tax Forum that advice on establishing an SMSF is advice concerning a structure in the same vein as advice on establishing a company or trust,” the review said.
“At this point, no financial product advice is being provided. Clients may be confused as to why their accountant can give advice on all business and investment structures but not an SMSF.”
However, the final report stopped short of recommending that the accountants’ exemption be restored, stating that a thorough review was needed to consider a range of factors that have since arisen, including the recommendations of the Hayne royal commission.
It believes such a review could be undertaken by the Productivity Commission.
“Having recommended the regulatory burden on tax (financial) advisers is to be reduced, the review believes it is reasonable that a similar level playing field should be considered for accountants,” the final report said.
“The review therefore recommends the government initiate a specific review of what advice accountants can and cannot give in respect of superannuation and which accountants that might apply to.”
In response, the government said it will support the recommendation in principle.
“The government will review this issue as part of Recommendation 2.3 of the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,” the government said.
Recommendation 2.3 of the royal commission recommended that the government review the effectiveness of measures implemented to improve the quality of financial advice.
In a public statement, Assistant Treasurer Michael Sukkar said increasing the independence of the TPB and reducing red tape for the tax profession are two of the government’s main objectives.
“Undertaking additional consultation prior to implementing some of the review recommendations will allow the government to further develop options, ensuring the best outcome for tax professionals and taxpayers who rely on their services,” Mr Sukkar said.
Chartered Accountants Australia and New Zealand leader, financial advice, Bronny Speed recently stated that she was optimistic about the government addressing some of the difficulties faced by accountants in terms of strategic advice for SMSF clients.
“The industry has had several sessions with Senator Hume, and she’s pretty keen on the concept of single-issue advice or single-topic advice. So, it’s gaining momentum, so I’m really hoping we’ll be able to do those basic things without a licence,” Ms Speed said.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.