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Frequently asked questions – Single Disciplinary Body for financial advisers

Frequently asked questions – Single disciplinary body for financial advisers

The draft Bill for the new disciplinary system for financial advisers was introduced into Parliament on 24 June 2021 - Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021.  

The Bill also looks to implement Recommendation 7.1 from the Independent Review of the Tax Practioners Board (TPB). This TPB review recommended that a new model for regulating tax (financial) advisers be developed which looked to reduce the regulatory overlap for tax (financial) advisers.

The following questions and answers should help you understand the changing regime for tax (financial) advisers and your registration with the TPB. All answers provided below are subject to the passage of the Bill.


Why is the Government changing the regulation of tax (financial) advisers?

Are these changes to establish the new single disciplinary body finalised?

What is in the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021?

What does the new single disciplinary body mean for tax (financial) advisers?

From 1 January 2022, who can legally provide tax (financial) advice services for a fee?

I want to start, or continue to, provide tax (financial) advice services for a fee now. Do I need to register or renew my registration with the TPB?

From 1 January 2022, what happens to my tax (financial) adviser registration with the TPB?

How long will the TPB be able to accept new and renewal applications for registration as a tax (financial) adviser?

From 1 January 2022, if I make a complaint to the TPB about a tax (financial) adviser, will the TPB handle my complaint?

I am a member of a professional association that has been accredited by the TPB as a recognised tax (financial) adviser association. Will this accreditation still exist from 1 January 2022? 

From 1 January 2022, will tax (financial) advisers be required to meet new education and training requirements?

I am seeking to provide tax (financial) advice services for a fee from 1 January 2022 – what do I need to do? 

I am currently registered with the TPB and my registration expires on 1 November 2021 – what do I need to do? 

I am currently registered with the TPB and my registration expires on 1 February 2022 – what do I need to do?

I am currently registered with the TPB and my registration expires on 1 August 2022 – what do I need to do?

I will be looking to surrender my tax (financial) adviser registration with the TPB on 1 January 2022, will you refund the fee I paid to the TPB?

Where can I get more information?

 

Why is the Government changing the regulation of tax (financial) advisers?

In 2019, the Government announced an independent review into the effectiveness of the Tax Practitioners Board (TPB) and the Tax Agent Services Act 2009 (TASA) to ensure that tax agent services are provided to the public in accordance with appropriate professional and ethical standards.

On 27 November 2020, the Government released the final report and its response to the TPB review. The TPB Review recommended (Recommendation 7.1) that, in alignment with implementing recommendation 2.10 of the Financial Services Royal Commission Final Report, a new model be developed for regulating tax (financial) advisers in consultation with Australian Securities and Investments Commission (ASIC), Financial Adviser Standards and Ethics Authority (FASEA), the TPB and Treasury.

The Government agreed in-principle to implement recommendation 7.1 by ensuring that the new disciplinary regime for financial advisers also applies to individual tax (financial) advisers.

On 9 December 2020, the Government announced that it would deliver Recommendation 2.10 from the Financial Services Royal Commission. The Royal Commission had concluded that there are gaps in the existing disciplinary system in addressing misconduct by financial advisers and that there are currently too many different pathways for consumer complaints and inadequate sanctions to deal with misconduct appropriately. Given this, the Royal Commission recommended a single disciplinary body be established and all financial advisers who provide personal financial advice to retail clients be registered.

To implement recommendation 2.10, the Government decided to expand the functions of Financial Services and Credit Panel to perform the role of the single disciplinary body for financial advisers by leveraging the panel’s existing expertise.

As part of the 9 December 2020 announcement, the Government also announced that it would wind-up the FASEA and transfer its functions to the Minister responsible for administering the Corporations Act and ASIC.

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Are these changes to establish the new single disciplinary body finalised?

On 24 June 2021, the Government introduced the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021 into Parliament.

The majority of changes in the Bill are proposed to commence from 1 January 2022 and are subject to the Bill being passed.


What is in the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021?

The Bill will further streamline the number of bodies involved in the oversight of financial advisers. In summary, the Bill seeks to:

  • strengthen the financial advice sector and establish a single disciplinary body for financial advisers, requiring all financial advisers who provide personal financial advice to retail clients to be registered
  • expand the role of the Financial Services and Credit Panel within ASIC to operate as the single disciplinary body for financial advisers to ensure that less serious misconduct does not go unaddressed
  • create additional penalties and sanctions for financial advisers who have breached their obligations under the Corporations Act, reflecting that the current set of sanctions are limited to banning a financial adviser
  • transfer functions from FASEA to the Minister responsible for administering the Corporations Act and to ASIC to streamline the regulation of financial advisers
  • ensure that tax (financial) advisers will no longer be regulated by the TPB but instead will be regulated only under the Corporations Act.


What does the new single disciplinary body mean for tax (financial) advisers? 

Subject to the passage of legislation, from 1 January 2022, a person who provides tax (financial) advice services for a fee will no longer need to register with the TPB. The adviser will only need to be registered with ASIC.

To provide tax (financial) advice services for a fee, an adviser must also meet the additional education and training standards set by the Minister which will be specific to advisers wanting to provide tax (financial) advice services. An adviser can also provide tax (financial) advice if they are a registered tax agent.

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From 1 January 2022, who can legally provide tax (financial) advice services for a fee?  

Subject to the passage of legislation, an entity can only provide tax (financial) advice service for a fee if they are: 

  • a registered tax agent; or
  • a qualified tax relevant provider (i.e. meet the additional education and training standards set by the Minister). 


I want to start, or continue to, provide tax (financial) advice services for a fee now. Do I need to register or renew my registration with the TPB?  

From now until 31 December 2021, any entity that wishes to provide a tax (financial) advice service for a fee must be registered with the TPB as either a tax agent or tax (financial) adviser. Failure to do so may result in the imposition of a civil penalty by the Federal Court of Australia.  


From 1 January 2022, what happens to my tax (financial) adviser registration with the TPB? 

  • If your TPB registration continues beyond 1 January 2022, you will be deemed to be registered with ASIC from that date.
  • Generally, your registration with ASIC will continue until the Australian Business Registry System (ABRS) becomes operational.
  • However, once the ABRS is operational, which will be no later than 4 years after the day the Act receives Royal Assent, you will need to renew your registration annually.
  • If you are registered immediately before the ABRS is operational, the obligation to renew your registration will not fall due until the next financial year.


How long will the TPB be able to accept new and renewal applications for registration as a tax (financial) adviser?  

The TPB will only be able to accept new and renewal application for registration as a tax (financial) adviser up to and including 31 December 2021. From that date, the TPB will only be able to assess applications on hand.

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From 1 January 2022, if I make a complaint to the TPB about a tax (financial) adviser, will the TPB handle my complaint?

The TPB will be able to consider your complaint so long as the complaint relates to conduct that occurred before 1 January 2022. For all complaints after this time, the TPB will refer the matter to the ASIC and the Financial Services and Credit Panel.


I am a member of a professional association accredited by the TPB as a recognised tax (financial) adviser association. Will this accreditation still exist from 1 January 2022?

No. From 1 January 2022 the TPB will no longer be able to accredit tax (financial) adviser associations. The Professional industry associations will no longer be recognised under the TASA. They will also not be recognised under the Corporations Act.


From 1 January 2022, will tax (financial) advisers be required to meet new education and training requirements? 

To provide tax (financial) advice, an adviser must meet the additional education and training standards set by the Minister (if any). 
 

I am seeking to provide tax (financial) advice services for a fee from 1 January 2022 – what do I need to do?

You will need to be registered with the TPB as a tax agent or be a qualified tax relevant provider (i.e. meet the education and training standards set by the Minister) under the Corporations Act.

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I am currently registered with the TPB and my registration expires on 1 November 2021 – what do I need to do?

If you wish to continue provide tax (financial) advice services between 1 November 2021 and 31 December 2021, you must renew your registration with the TPB. If you continue to provide tax (financial) advice services for a fee whilst unregistered, you may have a civil penalty imposed by the Federal Court of Australia.
 

I am currently registered with the TPB and my registration expires on 1 February 2022 – what do I need to do?

You can renew your registration with the TPB but you will need to lodge your renewal applicaton by 31 December 2021. If your renewal is approved, you will be deemed to be registered with ASIC until the Australian Business Registry System becomes operational. For further information refer to an earlier question about deemed registration with ASIC.

 

I am currently registered with the TPB and my registration expires on 1 August 2022 – what do I need to do?

As you will be registered with the TPB on 1 January 2022, you will be deemed to be registered with ASIC from that date and until your registration with the TPB expires on 1 August 2022.

If you wish to continue to provide tax (financial) advice services after that time, you will need to either be registered with the TPB as a tax agent or a qualified tax relevant provider under ASIC.

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I will be looking to surrender my tax (financial) adviser registration with the TPB on 1 January 2022, will you refund the fee I paid to the TPB?

Under the TASA there are no refunds if you wish to surrender your registration part way through your registration period as the fee paid was an application fee. If you want to keep providing tax (financial) advice services you will need to be registered with ASIC and pay a corresponding registration fee to ASIC.
 

Where can I get more information?

More information can be found on Treasury’s website.  

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Last modified: 20 July 2021