In its response to the review of the Tax Practitioner's Board, the Government has announced its in-principle support for the reduction of regulatory overlap in financial advice.
This sentiment was expressed in response to the recommendation that a new model should be developed in consultation with ASIC, FASEA, the TBP and Treasury for regulating tax advisers. The new model, the review said, should incorporate a single point of registration for individuals, a requirement to abide by a single code of conduct and the requirement that any disciplinary action meted out to a tax adviser should be decided on by experts in the profession.
The Government's response was that it is currently assembling a new disciplinary system for all financial advisers, including tax advisers, as part of its commitment to implementing the recommendations made in the final Royal Commission report. Under this system, tax advisers will only be subject to a single disciplinary regime.
Commenting on Treasury's response, Assistant Treasurer Michael Sukkar said he believes the Government will be able to implement changes that "will result in a more effective and independent TPB and a reduction in red tape for tax practitioners."
He continued: "Implementation of these recommendations will enhance community confidence, and support high standards in the tax profession."
The Government's response to the TPB review follows not long after Treasurer Josh Frydenberg announced that under proposed legislation, parts of industry codes of practice for advisers will be made "enforceable code provisions" in instances where they "relate to commitments made by a code subscriber to the consumer."
It remains to be seen what enforceable provisions exist (or will come to exist) in the FASEA Code of Ethics, which is currently under fire from industry associations due to a perceived lack of clarity regarding its practical applications. As discussed on Tuesday, there were numerous specific complaints about the standards in the Code as it currently stands – including case studies about the perennial problem of clients not understanding the advice given to them, a subject discussed in the latest season of Secrets of the Money Masters.
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