Financial planners have criticised a parliamentary joint committee report that supports plans to force them to obtain tax qualifications arguing that the changes would force many out of the industry.
Under the proposals the committee recommended financial advisers be required to take courses in commercial and tax law (requiring up to 260 hours of study), would be required to have at least 18 months of experience, and be a member of a professional organisation.
Mark Rantall from the Financial Planning Association has expressed his dismay at the developments by saying, “it is further proof that industry was right not to trust the TASA process, as the original proposal discussed was for one extra tax unit at university level to be completed during transition. Now it is two.”
Treasury recommended the areas of study would include courses on torts, contracts, competition and consumer law, insurance, intellectual property and bankruptcy and insolvency.
Mr Rantall has said, “financial advisers did not need such a qualification and the concept that a
30-year veteran financial planner who has been giving comprehensive and competent advice to his or her clients for all this time and now may have to go back to university to prove that competency is absurd.” He has reported that, “as many as 18,000 financial planners will be directly affected and up to 50,000 advisers may be captured” indicating that “reforms will have a significant impact which has not been adequately quantified. Many quality financial planners may well be forced out of business,” he has said.
While advisers have not responded to the decision encouragingly accountants have backed the Treasury proposals with Robert Jeremenko the Tax Institute’s senior tax counsel commenting that, “this is about ensuring integrity in the tax system and confidence in the people advising on it, as well as acknowledging the breadth and extent of the skill required to navigate it. For someone wanting to register as a tax agent, they too are required to meet relevant education and experience requirements.”