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TPB Financial advisers forum report - 2 November 2017

TPB Financial advisers forum report – 2 November 2017

On 2 November 2017 Ian Taylor (Chair), Julie Berry (Board member) and fellow Tax Practitioners Board (TPB) colleagues held a TPB Financial adviser forum with representatives from associations that represent the financial planning profession.

In accordance with past practice, this report provides an overview of key issues that were discussed at the forum; it is not intended as minutes of the forum, nor does it represent the final views of the TPB.

Update from the TPB

Operational matters

Registrations and compliance update

  • The forum noted a summary snapshot of registrations and compliance activity and observed that current resourcing constraints are impacting on the TPB’s ability to meet operational service standards, noting that there are now almost 79,500 registered tax practitioners (representing more than 3 times the number of practitioners registered when the TPB first commenced operations in 2010).
  • The spike in transitional tax (financial) adviser applications received just prior to the 30 June 2017 cut-off has had an impact on the weighted average processing times for processing new registration applications.  While the TPB has now made large inroads into the transitional applications on hand and anticipates finalising these applications shortly, the TPB is conscious that a tranche of approximately 2,000 tax (financial) adviser renewal applications were due at the end of October and that a large influx of approximately 13,000 applications (in a final tranche) is due by the end of January 2018.
  • The TPB is continuing to focus on processing new applications, noting that registered tax practitioners who lodge registration renewal applications on time (at least 30 days before registration expires) will remain registered until the TPB notifies them of the outcome of their renewal application even if past the expiry of registration date.
  • The TPB also continues to look for ways to improve and streamline processes, and reallocates resources as appropriate, including progressing work on:
    • implementing ongoing improvements to online forms to provide a more streamlined user experience
    • the qualifications advice service, to improve the way tax practitioners can determine whether either a specific course is Board approved or the applicant’s qualifications meet with regulatory requirements, with final testing currently underway before this service will be made available externally on the TPB website by the end of the year
    • changes to the Contact Us page (including new online contact forms) to facilitate resolution of most enquiries online, with final testing in progress before delivering this service by the end of the year
    • improving search and display functionality of current information on the TPB Public Register.
  • It was reiterated that if a corporate authorised representative (CAR) has the authority to provide a tax (financial) advice service for fee or reward, part or all of which is payable via a third party, the CAR will also need to be registered. Whether a CAR provides a tax (financial) advice service will depend on the nature of the Australian Securities and Investments Commission (ASIC) authorisations that the CAR has, noting that in most cases a CAR is considered to provide tax (financial) advice services if they have an ASIC authorisation to provide financial product advice or to deal with a financial product. 
  • The number of complaints and referrals for the September 2017 quarter was slightly higher than in the same period the previous year (425 compared to 411); however, there continues to be a very small proportion of registered tax (financial) advisers on which sanctions are applied. Most action is around those subject to ASIC banning orders, with a streamlined process in place for information sharing regarding orders.
  • The Board is taking a graduated compliance approach to appropriately address the small number of instances where there is recurring late lodgement of annual declarations.

Communications activity

The TPB has continued to increase its communication and awareness activity, including continuing to raise awareness of registration requirements. The broad-based approach to Outreach involves a rolling schedule of webinars, speaking engagements, eNews, social media and media releases. The TPB also continues to welcome any opportunities to speak at national and state conferences of associations.

Tax (financial) adviser renewal process

  • The Forum noted an overview of the renewal process for individuals, companies and partnerships, including a run-through of process steps, how the TPB handles applications and what happens after applications are assessed.
  • There will be a continued focus on ongoing support, with a rolling schedule of webinars (including a top tips for renewing webinar). It was also noted that there is a range of support tools on the TPB website, including renewal kits, updates to Frequently asked questions, a YouTube video to help walk through completion of the Statement of relevant experience, and further specific information on how to demonstrate relevant experience. There will also be another upcoming special edition of eNews for Australian financial services licensees in early December.
  • A schedule of reminder messages is being employed for tax (financial) advisers due to renew by 31 January 2018, with the staged communications approach facilitating further opportunity to address email bounce-backs.
  • The TPB appreciates the support provided by associations in sharing messages through communication channels, including in highlighting the importance of ensuring contact details are up-to-date and encouraging early lodgement of renewal applications. To assist in facilitating awareness and engagement, the Forum suggested that the TPB provide some key communication messaging, outlining some key issues and references regarding the renewal process, for associations to utilise in sending relevant messages to their members.

Policy matters

Professional associations – annual declaration process and governance related arrangements

  • It was noted that the TPB released the high-level principles-based Exposure Draft Information Sheet on 3 October, to provide guidance to professional associations in relation to the TPB’s interpretation and application of the requirements for recognition of recognised professional associations (under the Tax Agent Services Regulations 2009) that relate to corporate governance, operational procedures and accountability.
  • It was confirmed that submissions close on 17 November and that the TPB will consider all submissions received prior to finalising the document. It was also noted that this guidance will be a reference point when considering future rounds of annual declaration responses from recognised professional associations.

Outsourcing, offshoring and the Code of Professional Conduct

The Forum noted that comments closed on 12 October for the Exposure Draft Practice Note on outsourcing, offshoring and the Code of Professional Conduct. It was confirmed that the TPB received several submissions which contained a range of views, with these submissions currently being considered before determining next steps.

Legislative instrument for tax (financial) advisers

The TPB will progress work on preparing a draft instrument and a draft explanatory statement for consultation, having regard to previous Consultative Forum and Financial Adviser Forum feedback, with specific feedback expected to be sought at the next Forum meetings before issuing for wider consultation and feedback.

Exemption from providing financial product advice

The forum noted that the TPB has worked with and provided guiding principles to the Australian Securities and Investments Commission (ASIC) in relation to the operation of section 766B(5) of the Corporations Act (the exemption that advice given by a registered tax agent or BAS agent, within the meaning of the Tax Agent Services Act 2009, in the ordinary course of activities as an agent and that is reasonably regarded as a necessary part of those activities).  The TPB has provided input to ASIC on this point.

Financial Adviser Standards and Ethics Authority (FASEA)

The TPB recognises the importance of ensuring an effective liaison with FASEA (standards body under the Corporations Act) and has sought continuing consultation and greater alignment between regimes as appropriate.

Black Economy Taskforce

It was confirmed that the TPB made a submission in relation to the Black Economy Taskforce interim report and consultation paper outlining additional policy ideas. The Forum noted that it is important to ensure appropriate resourcing to achieve results, including in relation to handling appropriate referrals from the ATO. It was also observed that a final Taskforce report was scheduled to be released to government at the end of October.

Cyber security

  • The TPB recognises the emerging threat of cyber-attacks and the importance of tax practitioners proactively protecting themselves, their practice and their clients. It was noted that the July 2017 eNews edition referred to:
  • While not mandating requirements, the TPB’s approach to PI insurance will be reviewed in 12 months’ time, recognising that the market will mature and that any changes to requirements that may arise from future reviews will require appropriate lead-in time.
  • The TPB will continue to raise awareness of this emerging risk and monitor developments, including in webinars and other avenues as appropriate. The TPB will be running a specific Webinar in December about protecting practices from cyber-attacks, with early registration encouraged.

Whole of practice transfers

  • It was noted that previous TPB messages regarding whole of practice transfers were directed at registered tax and BAS agents.  The TPB is giving further consideration to this issue in relation to tax (financial) advisers, including having regard to the Office of Australian Information Commissioner (OAIC) approach to dealer groups.
  • It was reiterated that the Code of Professional Conduct in the Tax Agents Services Act 2009 states that unless you have a legal obligation to do so, you must not disclose information relating to a client’s affairs to a third party unless you have obtained their permission.
  • The TPB advised that they would further review the OAIC requirements in relation to this issue and report back to the next Forum meeting.

Next meeting

The Chair thanked forum members for their attendance and continuing feedback. The next meeting is scheduled to be held in March 2018 (date to be confirmed but tentatively scheduled for 14 March).

Last modified: 5 December 2017