Two regulatory changes have been announced in relation to financial planners:
- regulatory arrangements for financial planners who provide tax advice within the context of providing financial advice, to take effect from 1 July 2012.
- the release of Consultation Paper 153 Licensing: Training and assessment framework for financial advisers (CP 153) containing proposals relating to the assessment and professional development of financial advisers of Tier 1 products and changes to RG146.
Tax advice
Financial planners wishing to provide tax advice within the context of providing financial advice would need to be registered through ASIC with the Tax Practitioners Board under the Tax Agent Services Act 2009. These services would not extend to preparing or lodging tax returns or making representations to, or interacting with, the Commissioner of Taxation. To provide these more extensive services a person must be registered as a tax agent.
Not every financial planner within an entity that holds an AFSL will necessarily need to be registered to provide limited tax agent services.
A transitional framework would operate from 1 July 2012 that would enable financial planners (existing and new) to be eligible for a simple initial registration for a period of three years. This period can be used to attain competencies to deliver quality tax advice as part of financial planning advice.
Training for financial advisers
ASIC proposes amending the assessment and professional development framework for financial advisers by requiring:
- all new and existing financial advisers who provide Tier 1 financial advice to pass a Financial Services Competency Certification exam to ensure they have the requisite competencies to perform their role. (‘Entry Stage’);
- all new financial advisers following Entry Stage to be supervised by a supervisor (who has at least 5 years experience in the industry) for a minimum period of 1 year full time or equivalent;
- all financial advisers to undertake a Knowledge Update Review every three years on changes to laws, market issues and new products; and
- ongoing continuing professional development requirements.
