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TPB Financial Advisers Forum Report 10 November 2015

TPB Financial advisers forum report – 10 November 2015

On Tuesday 10 November 2015, Ian Taylor (Chair) and Tax Practitioners Board (TPB) colleagues held a TPB financial adviser forum in Sydney with representatives from associations that have an interest in financial planning.

The key points discussed at the forum are summarised below. This brief report is intended only to provide an overview of the issues that were discussed and does not represent the final views of the TPB, nor is it intended as minutes of the forum.

Update from the TPB

The following was noted during the overview provided:

  • As at the end of October 2015, there were 16,937 registered tax (financial) advisers - comprising 846 Australian financial service (AFS) licensees and 16,091 authorised representatives.
  • The TPB is continuing to receive a small but steady number of applications from AFS licensees and authorised representatives. It was noted that there may be a further spike before the end of December 2015 (when the notification period ends). Overall, the notification process has worked well.
  • While notification is a largely automated process, it was noted that the TPB encourages those large AFS licensees that are seeking to register more than 20 authorised representatives to notify as soon as possible, so as to facilitate a streamlined process and enable the TPB to answer any relevant queries before the Christmas shutdown period from midday on 24 December 2015. It was also noted that, from 1 January 2016, unregistered entities that continue to provide tax (financial) advice services for a fee or other reward may be liable for civil penalties, regardless of whether they use a disclaimer.
  • The TPB is continuing to progress preparations to ensure operational readiness for the transitional and standard registration phases commencing from 1 January 2016, including testing forms and correspondence, and expansion of communications activities. Information will also soon be published on the TPB website in relation to what is included within the application form (including noting what is needed for the purpose of submitting an application) to assist those entities seeking to register from
    1 January 2016.
  • It was also highlighted that when an entity seeks registration under the standard or transitional option, their registration will not automatically be granted and the entity will need to wait until the TPB has made a decision and processed the application (as distinct to the largely automated notification period).

Communication activities 

  • The forum noted the listing of recently issued TPB information products and observed that a range of material continues to be developed, including the:
  • tailored editions of eNews for tax (financial) advisers in August and October 2015
  • regularly updated Board approved Australian taxation law and commercial law course lists for tax (financial) advisers
  • TPB 2014-15 Annual report
  • latest online edition (No. 4) of the Summary of penalties, sanctions and terminations, which includes some of the most recent compliance outcomes and decisions by the TPB’s Conduct Committee, and cases that have been heard by the Administrative Appeals Tribunal.
  • Website improvement: The TPB is progressing work on reviewing and improving website content for the purpose of enhancing the user experience and reducing the time taken for processes, with usability testing informing this work. This work will continue into 2016, wherein there will be a focus on website structure (providing user-segmented information) and improved search and navigation functionality.
  • Webinars and Outreach: The TPB is continuing to present webinars (over 300 attendees across three sessions as at the time of this forum) and also recently provided face-to-face information sessions (around 270 tax (financial) advisers had attended across four sessions – comprising of two sessions in Sydney on 7 October, and two sessions in Melbourne on 19 October), covering what AFS licensees and authorised representatives need to consider now to be ready to renew their registration. These events have been well received, with a good level of attendance and interaction.
  • It was noted that additional webinars for tax (financial) advisers are being delivered on 23 November and 14 December, with further details regarding webinar scheduling to be made available on the TPB’s website. It was also reiterated that the TPB would welcome opportunities to participate in association conferences and speaking events on relevant topics.

Current consultation re standards and potential TASA implications

  • It was observed that the Government’s 20 October 2015 response to the Financial System Inquiry included the acceptance of a number of key recommendations made by the Parliamentary Joint Committee on corporations and financial services, with the Government intending to introduce legislation to raise the professional standards of financial advisers by mid-2016.
  • It was noted that the recommendations may have an impact in relation to the Tax Agent Services Act 2009 (TASA) and the TPB is currently engaged in relevant consultations, with the message being reinforced that the TPB will need to work closely with the Government and Treasury to address any matters.

Annual declarations for registered tax and BAS agents:

  • It was highlighted that the first release of the annual declaration for registered tax and BAS agents, to demonstrate that they are meeting their obligations as a registered agent, will commence on 17 November (for those who have an anniversary renewal date on 1 January).
  • It was noted that the annual declaration is a simple way for all registered tax and BAS agents to show that they meet ongoing registration requirements, including:
    • having Professional indemnity (PI) insurance cover (with pre-filled details where the agent has previously provided this information to the TPB)
    • undertaking continuing professional education (individuals only)
    • any changes in practice structure and/or personal details (including information voluntarily provided by the registered agents concerning recognised association affiliation)
    • satisfying fitness and propriety requirements
    • meeting personal tax obligations.
  • It was observed that while the annual declaration process is not being applied to tax (financial) advisers at present, it will eventually be in place for tax (financial) advisers when the transitional arrangements are finalised.

Policy matters

Code of Professional Conduct item 6 – Confidentiality of client information 

  • The forum noted the draft Exposure Draft (ED) for the purpose of providing guidance to tax (financial) advisers in relation to confidentiality obligations under subsection 30-10(6) of the TASA (Code Item 6), which is one of the obligations under the TASA’s Code of Professional Conduct (Code). It was observed that the document had been updated pursuant to consideration of feedback received at the previous financial adviser forum.
  • The forum supported release of an ED for a 45-day comment period, noting that any further comments can be provided during the public submission period and that there will be referral back to the forum for further guidance in the event that any contentious issues are raised during this public submission period.

Cloud computing and the Code of Professional Conduct 

  • The forum noted the draft ED providing brief guidance to tax practitioners in relation to how interaction with Cloud influences meeting the Code obligations.
  • It was observed that the document is specifically targeted to tax and BAS agents in the first instance and had been updated pursuant to consideration of feedback received at, and subsequent to, the previous TPB Consultative forum and Financial adviser forum meetings.
  • The forum noted that the ED is being released for a 45-day comment period and that any further comments can be provided during the public submission period. It was confirmed that there will be referral back to the TPB Consultative forum and Financial adviser forum meetings for further guidance as appropriate, in the event that any contentious issues are raised during this public submission period.
  • It was also noted that the TPB’s forward work program includes the development of other guidance in relation to software and that the TPB is in ongoing discussions with software providers to address other issues separately (outside of the information sheet), for the purpose of assisting providers and their clients to comply with relevant requirements under the TASA.

On-hire firms 

  • The forum briefly noted that the TPB considered comments and submissions received on the original ED (on labour hire firms) and that it was reissued for a second exposure draft period on 20 October. It was observed that the ED was prepared for the purpose of assisting on-hire firms involved in the provision of tax related services to understand the operation of the tax agent services regime and whether or not they need to register with the TPB. It was also observed that submissions on the ED close on 4 December.

Other policy work in progress

   It was noted that pre-exposure draft material is expected to be provided to future meetings of the
   forum, for the purpose of seeking further guidance and feedback.

  • It was noted that the TPB will continue to develop guidance on the Code for tax (financial) advisers, having due regard to previous feedback received from the forum (including in relation to priorities), with work currently progressing on the following:
    • obligations in relation to reasonable care under subsections 30-10(9) and 30-10(10) of the TASA (Code items 9 and 10)
    • obligations in relation to managing conflicts of interest under subsection 30-10(5) of the TASA (Code item 5)
    • review of the TPB’s foundation explanatory papers on the Code, and on Fitness and propriety.
  • It was also observed that while the TPB is currently prioritising work in relation to a BAS services legislative instrument, work will also progress to allow certain services to be included in the definition of a tax (financial) advice service in relation to interaction with the ATO. It was noted that, as part of the consultation process, the TPB will issue an ED discussion paper to the forum in due course.

Next meeting

The Chair thanked the forum members for their attendance and consultative approach during the current Board’s term, and noted that he would commend to the incoming Board the continuance of the Financial Advisers forum and scheduling of meeting dates for the 2016 calendar year early in the new Board’s term.

Last modified: 1 December 2015