Go to top of page

TPB Financial advisers forum report - 8 November 2018

TPB Financial advisers forum report - 8 November 2018

Thank you for joining Ian Taylor (Chair), Michael O’Neill (Secretary) and fellow Tax Practitioners Board (TPB) colleagues at the TPB financial adviser forum held on Thursday 8 November 2018. We appreciate your valuable input and have produced a summary below to assist your association with communicating key messages to your members.


Cost Recovery Implementation Statement

  • It was noted that the Cost Recovery Implementation Statement (CRIS) is published on the TPB website, providing information on how the TPB will implement partial cost recovery for the processing of registration and renewal applications of tax practitioners.


Operational update

  • It was confirmed that the current TPB work program includes review of the TPB’s Public register search functionality.

Registrations

  • The forum noted that there was only a small number of tax (financial) adviser registration applications on hand as at end-October 2018 (including 11 remaining tax (financial) adviser renewal applications) and that registrations processing is now in a business-as-usual phase.
  • The TPB is undertaking relevant preparatory activity for a forthcoming tranche of approximately 2,300 tax (financial) adviser renewal applications (who registered under the transitional registration option) due to be lodged with the TPB in January / February 2019. It was reiterated that relevant applicants should determine what registration pathway is most suitable and the associated requirements, and that the TPB is appreciative of supporting messages from forum representatives. It was also noted that there is a specific upcoming webinar being held (on 15 November 2018) to assist those tax (financial) advisers who registered under the transitional option to be ready to renew their registration.

Compliance

  • There has been an increase in the number of complaints received across all practitioners (934 as at financial year-to-date to end-October 2018, compared to 546 for the corresponding period in the previous year), with these complaints arising from a range of sources (including the public, ATO referrals and other practitioners). There has also been an increase in proactive compliance cases, including continuing professional education (CPE) review cases and annual declaration activity.
  • There continues to be a very small proportion of registered tax (financial) advisers on which sanctions are applied, with most action around those subject to ASIC banning orders or enforceable undertakings; however, there is a small number of annual declaration exception cases.
  • Annual declaration activity 
    • The TPB will be focusing on tax (financial) advisers over the next year, noting that many annual declarations will be due in December 2018 / January 2019. Personal tax obligations continue to be a key exception issue that has arisen with this activity.
  • The TPB is currently looking at a more systemic program to facilitate ensuring practitioners are up-to-date with taxation obligations, and to support a level-playing field and community expectation of people who are in a trusted position. In this regard, initial observations (using ATO debt and lodgement data) indicate thousands of registered practitioners have one or more outstanding income tax lodgements and/or one or more outstanding activity statements. The TPB asked Associations for their support in reiterating the message that registered tax practitioners ensure they keep up-to-date with their obligations.
  • CPE reviews
    • The TPB is progressing its review in relation to tax practitioner compliance with the TPB’s CPE policy requirements. Preliminary CPE audit results were noted in the September eNews edition and updated results are expected to be published in the December eNews edition. Having regard to initial data analysis, it is expected that there will be a more rigorous focus on practitioners in relation to their CPE/CPD responsibilities.
    • In accordance with a risk-based approach, initial focus is on those tax practitioners who are not subject to another regulatory requirement or who are not members of a recognised professional association, and therefore are unlikely to be subject to other CPE/CPD review activity. Cases are selected at random from individual tax and BAS practitioners who renewed in the previous month.
    • As at end-September 2018, 110 CPE reviews had been completed – in particular, 85 were found to be compliant, 21 education letters were sent, and 4 practitioners had surrendered their registration. A further 115 reviews were in progress, with 3 referred for formal investigation as no CPE activities had been undertaken.
    • The review program is expected to be expanded to tax (financial) advisers and members of some recognised associations in future rounds. Further, the TPB intends to review the TPB’s CPE policy requirements to ensure the requirements remain appropriate.
    • The TPB is appreciative of Association support in relation to extending key messages, including the importance of ensuring there is contemporary relevant knowledge.
  • In conjunction with continuous improvement activity, the TPB will be talking further to the Australian Financial Complaints Authority (AFCA) regarding any complaint handling processes.

Annual declarations for Recognised professional associations

  • The TPB has considered learnings from previous annual declaration rounds and sought feedback on a new (draft) proposed annual declaration form and accompanying Guide document as part of its commitment to streamlined processes and continuous improvement. The TPB is seeking to employ an exceptions-based approach for future annual declaration rounds, with targeted information (about any relevant changes since the previous annual declaration round) to be sought from associations. The forum was supportive of the proposed approach and suggested minor edits to the proposed form for further clarity. It was confirmed that this feedback will be considered by the TPB prior to finalising the documents.

Communications update

  • The TPB is continuing its commitment to communication and awareness activity, including a broad-based approach to Outreach that involves a rolling schedule of webinars, speaking engagements, eNews, social media and media releases.
  • There was success with the June advertising campaign to drive consumers to the TPB register (to check their practitioner is registered), with searches of the TPB Register increasing by 15% (compared to the same period in 2017), the advertisement being viewed more than 1.1 million times during the campaign, and further uptake of messaging and increased awareness in social media.
  • The TPB recognises that it needs to continue to tell the story about how we are working as an effective regulator and where we are identifying people that are operating outside of the realm of the trusted relationship, with the TPB proposing to amplify messaging and use appropriate narrative to tell the story of the TPB’s approach to compliance at a high level. Further, the TPB will review its communication strategy in conjunction with stakeholder feedback.
  • The forum noted a media release in relation to the recent Federal Court of Australia case of Ham v Tax Practitioners Board [2018] FCA 1652, helping support the message that the TPB is identifying and taking action against tax practitioners who do not meet the requisite standard of fit and proper conduct.
  • To further its efforts to protect consumers, the TPB is working with the ATO and revisiting the parameters of information that can be made public, and will be ‘naming and shaming’ where appropriate.
  • The TPB is also seeking to change the TPB’s Public Register information to provide more detailed information.​​​​​​​


Policy matters

FASEA consultation papers

It was noted that the TPB provided submissions in relation to FASEA consultation papers, particularly noting the regulatory overlap and the need for further clarity and guidance where appropriate.

Transfer of business and confidentiality

The forum provided feedback in relation to a pre-Exposure Draft Practice note, which was drafted after consideration of feedback on a discussion paper considered at the previous forum and is consistent with the principles outlined in the finalised information sheet on Code of Professional Conduct item 6 – TPB(I) 32/2017 Code of Professional Conduct - Confidentiality of client information for tax (financial) advisers. It was confirmed that the TPB will review forum feedback received before determining next steps, including in relation to timing of any release.

Review of TPB information products

  • It was noted that the TPB has published several information products on its website, including a range of policy and guidance material (explanatory papers, guidelines, information sheets and practice notes) developed in conjunction with stakeholder feedback. The TPB is now seeking to undertake a dedicated review of its material as part of general stocktake business as usual activity.
  • Comment was sought on whether the TPB has appropriate product types and topics, as well as in relation to readability and what current products should be prioritised for review. It was confirmed that relevant feedback could be provided to the TPB out of session, which will then be considered by the TPB as appropriate when reviewing its forward work program.
  • Legislative instrument for tax (financial) advisers: It was noted that the TPB is progressing the legislative instrument in relation to tax (financial) advice services, with document proceeding through final clearance stages. It was reaffirmed that the ATO is comfortable with the proposed scope of the instrument, and that the TPB will advise the forum of any further developments in relation to finalising the instrument.


Next meeting

The Chair thanked forum members for their attendance and continuing feedback. The next meeting is scheduled to be held on 6 March 2019 in Sydney. A ‘save the date’ notification will be forwarded to participants shortly, pending final details.


Last modified: 29 November 2018