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TPB Financial Advisers Forum Report 6 April 2016

TPB Financial advisers forum report – 6 April 2016

On Wednesday 6 April 2016, 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 Chair noted that a new Board has been in place since 22 January 2016 and expressed his appreciation for the contributions of previous Board members. It was also noted that brief biography information in relation to current Board members is available on the TPB website. The current Board members include:
    • Ian Taylor (Chair and registered tax agent; reappointed for 3 years)
    • Julie Berry (registered tax (financial) adviser; appointed for 18 months)
    • Jim Hawson (registered tax agent; appointed for 3 years)
    • Julianne Jaques (barrister specialising in taxation; appointed for 3 years)
    • Ian Klug (chartered accountant and professional director; appointed for 3 years)
    • Greg Lewis (registered tax agent and small business proprietor; appointed for 3 years)
    • Russell Smith (registered BAS agent; reappointed for 18 months)
    • Yvonne Sneddon (professional non-executive director; reappointed for 18 months).
  • The TPB’s strategy and direction (for the period 2016-19) will be reviewed in the near future, with an update to be provided at the next forum – in this regard, it was observed that there will be particular focus on:
    • objective(s), strategies and goals
    • key performance indicators (KPIs)
    • service standards.
  • It was also highlighted that due to budgetary issues being faced by the TPB, in particular, to process a large number of tax (financial) adviser renewal applications from July 2017, there may be a need to reconsider the future work program and service standards in due course.

Registrations update

  • As at the end of February 2016, there were 75,489 registered tax practitioners (tax agents, BAS agents and tax (financial) advisers ). As expected, there was a spike in tax (financial) adviser applications received before the notification period ended on 31 December 2015. In particular, as at 29 February 2016 there were 19,046 registered tax (financial) advisers, comprising 1,060 Australian financial service (AFS) licensees, 17,967 authorised representatives (ARs) and 19 other representatives in comparison to 16,937 registered tax (financial) advisers (comprising 846 AFS licensees and 16,091 ARs) as at the end of October 2015 (as reported at the previous forum).
  • There has been a small but steady number of registration applications received since the transitional and standard registration phases commenced on 1 January 2016. In particular, as at the date of the forum (6 April 2016), there have been 182 applications, with 120 processed (73 under the transitional option and 47 under the standard registration option) and 62 on-hand (44 transitional and 18 standard).
  • The following messages were also highlighted in relation to tax (financial) adviser registration:
    • Processing times for future applications may be impacted by the current resourcing constraints and the large influx of standard registration renewal applications expected in due course (from July 2017, depending on when entities notified).
    • Registration under the standard or transitional option cannot automatically be granted (as distinct to the largely automated notification period) as each application must be assessed (in relation to required qualifications and/or experience) before a decision can be made on whether the registration is granted.
    • If an application is granted under the transitional or standard option, the applicant will be registered for at least three years from the date the TPB makes a decision.
    • Tax (financial) advisers who lodge renewal applications on time under the standard registration option (in due course when appropriate) will remain registered until a decision on the renewal application has been made.
    • Tax (financial) advisers must apply to renew registration at least 30 days before it expires to continue providing tax (financial) advice services.

Registered symbol

  • It was confirmed that legal formalities have been completed in relation to extending availability of the registered symbol to tax (financial) advisers who register under the standard registration option, with activity now being undertaken to progress implementation and delivery. Further information in relation to availability will be provided in due course.

Annual declarations for registered tax and BAS agents

  • It was noted that an annual declaration process has been implemented for registered tax and BAS agents, which is due on the anniversary of the practitioner’s renewal date (other than in the year that registration needs to be renewed).
  • In particular, the annual declaration provides a simple method for all registered tax and BAS agents to show that they meet ongoing registration requirements, including:
    • maintaining professional indemnity (PI) insurance cover (with pre-filled details where the practitioner has previously provided this information to the TPB)
    • undertaking continuing professional education
    • meeting personal tax obligations
    • meeting the fit and proper person requirements
    • notifying the TPB of any changes in registration details or circumstances.
  • It was confirmed that the annual declaration process is only being applied to registered tax and BAS agents at present; however, it will eventually be in place for tax (financial) advisers in due course.

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 tax (financial) adviser editions of TPB eNews in December 2015 and February 2016
    • new forms in relation to Statement of relevant experience and Letter of verification for tax (financial) advisers
    • new website content, including in relation to relevant experience, registering under the transitional and standard registration options, and renewing registration
    • Exposure draft TPB Information Sheet TPB(I) D31/2015 - Code of Professional Conduct – Confidentiality of client information for tax (financial) advisers
    • registrations and compliance processing statistics
    • updating other documents as appropriate, including Frequently asked questions and the Board approved Australian taxation law and commercial law course lists.
  • Webinars and Outreach: The TPB is continuing to present Webinars and face-to-face sessions to both potential and registered practitioners. These events have been well received, with a good level of attendance and interaction. It was also reiterated that:
    • these sessions are free and count towards Continuing professional education
    • details and registration for upcoming Webinars are available via the TPB website
    • there will continue to be a rolling schedule and ongoing development of Webinars pursuant to feedback (including suggestions for topics).
  • In addition to ongoing communications activity, including in relation to highlighting registration requirements, the TPB is also continuing to progress 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.

Policy matters

Code of Professional Conduct – Proposed exposure drafts

  • The forum noted draft Exposure Drafts (EDs) in relation to the following obligations under the Code of Professional Conduct (Code) of the Tax Agent Services Act 2009 (TASA), for the purpose of providing guidance to tax (financial) advisers:
    • Code Item 9 – Reasonable care: You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client.
    • Code Item 10 – Reasonable care: You must take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.
    • Code Item 5; – Managing conflicts of interest: You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to activities undertaken in the capacity of a registered practitioner.
    • Code Item 4: You must act lawfully in the best interests of your client.
  • It was observed that the documents had been developed pursuant to consideration of feedback received at previous forum meetings. Members suggested some minor changes for clarity, which will be considered by the TPB as appropriate prior to release of public exposure draft documents on the TPB website in due course.

Code item 6 – Confidentiality of client information

  • It was briefly noted that the TPB is considering the submissions received on Exposure draft TPB(I) D31/2015 Code of Professional Conduct – Confidentiality of client information for tax (financial) advisers – developed for the purpose of providing guidance to tax (financial) advisers on the confidentiality obligations under subsection 30-10(6) of the TASA (Code Item 6) – before determining next steps.
  • It was also noted that it is anticipated that an updated TPB information sheet will be considered at the next forum, subject to TPB Board committee’s consideration.

Current consultation regarding standards and potential TASA implications

  • It was reiterated that current consultation regarding Standards in the Financial services industry will have an impact in relation to the current TASA law and that the TPB has highlighted relevant issues as appropriate.
  • It was noted that the message is being reinforced that the TPB will need to work closely with Government and Treasury to address any inconsistencies and ensure appropriate alignment.

Other policy work in progress:

Legislative instrument work

  • The TPB is planning to progress work to provide for a legislative instrument allowing certain services to be included in the definition of a tax (financial) advice service in relation to interaction with the ATO – in particular, current services being considered are:
    • applying for a Tax file number (TFN) on behalf of a client
    • applying for an Australian business number (ABN) on behalf of a client
    • interacting with the ATO in regard to tax treatment of a client’s excess concessional and non-concessional superannuation contributions
    • representing a client in their dealings with the ATO in relation to determining dependency for Superannuation Industry (Supervision) Act 1993 purposes.
  • As part of the legislative instrument process, the TPB is intending to issue a relevant consultation paper to forum members for consideration in due course. The TPB will advise of further developments accordingly.

Forward work program on professional practice guidance

It was highlighted that there is also an extensive forward work program in relation to professional practice guidance, including:

  • further progress in relation to the 4 separate draft papers on the Code (Code items 4, 5, 9 and 10)
  • seeking to finalise an information sheet on Code item 6 (confidentiality);
  • review the explanatory papers on the Code of Professional Conduct and on Fit and proper person
  • review of current information products for tax and BAS agents.

Next meeting

  • The Chair thanked the forum members for their attendance and continuing feedback and guidance.
  • It was also noted that the next proposed meeting dates were for July 13 and November 9 and that confirmed dates will be advised in due course. It is anticipated that future meetings will be held in Sydney.

Last modified: 17 May 2016