Following an initial round of consultation as part of the government’s independent review into the effectiveness of the Tax Practitioners Board, Treasury has released a discussion paper highlighting the key considerations that will be taken into account by the review.

One of the areas that will be explored in the review, according to the discussion paper, is how the requirements set by the Financial Adviser Standards and Ethics Authority (FASEA) differ and conflict with those of the Tax Practitioners Board.

“This review is ideally placed to suggest ways to reduce the regulatory duplication,” the paper stated.

The discussion paper noted that based on the submissions received in the initial consultation, bringing tax financial advisers within the TPB regulatory regime has created a significant regulatory burden.

“In addition to the ATO and TPB, FASEA, ASIC and AFCA all have roles to play. One submission noted that some of their members are subject to four existing Codes of Ethics and that will become five with FASEA’s Code of Ethics commencing on 1 January 2020,” it stated.

“Any new model needs to be more streamlined, less complex and without the duplication of the current regime.”

In the paper, Treasury has outlined seven possible options for a new model for disciplining financial advisers based on the consultation.

One of these options is to allow financial advisers that provide incidental tax advice to not have to be registered with the TPB.

Treasury stated this option would mean reciprocal arrangements that permit tax advisers and accountants to provide incidental financial advice which in effect restores the concession that was previously available to accountants that are registered tax practitioners.

“This option would bring back the accountants’ exemption and allow accountants to provide basic SMSF advice and services without having to operate in the AFSL environment,” it explained.

Another option listed is for ASIC to operate as a ‘one stop shop’ for the regulation of financial advice and tax advice, where the TPB has no direct role in the regulation of financial advisers.

One of the other options listed was for ASIC and the TPB operate as co-regulators of financial advisers where the TPB is responsible for the imposition of sanctions for tax related matters.

With this option, TPB registration as a TFA would automatically attach to all financial advisers, who can then ‘opt out’ of the TPB regime if they do not provide tax advice, the paper explained.

Alternatively, this could operate as an opt in model instead, the paper said, where TPB registration as a TFA attaches to all financial advisers that ‘opt in’ to the TPB regime if they provide tax advice.

These proposals follow SMSF Adviser's extensive coverage on the wildly unpopular phase-out of the accountants exemption, the regulatory headaches the limited licence has created since the onset of new education standards, the ongoing lobby to have the limited licence reinstated from service providers and associations alike, and longstanding predictions that the regulatory environment as it stands would be restructured. 

Treasury has invited feedback to the discussion paper up until 30 August 2019. You can have your say here.