There are four options being proposed for advisers looking to be registered as a tax (financial) adviser, all of which have a minimum experience requirement.
The FPA has questioned how new entrants to the profession will be able to meet these requirements. In a submission to Treasury, the FPA said, “This would create restrictions on entry to the profession and serve as a deterrent, particularly to graduates and young students considering career options.”
The FPA sought clarification from the TPB that current and future students and new entrants to the profession will be permitted to work in the financial planning industry without breaching TASA, but CEO Mark Rantall says there has been no assurance yet.
“You clearly need a method of transitioning new advisers in and the problem with the model is it’s been moulded on the accounting profession model, and we have a different structure. We’re regulated by the Corporation Law, we have a licensing regime and an education regime through RG146, so this is trying to retrofit one model over another model in a completely different industry.”
He also says that it is inconceivable that an advice veteran of 30 years might have to head back to university to do more study.
This is further proof that an extension is needed to work through the issues, says Rantall.
The proposed four options are:
Option 1: Tertiary qualification
Under this option, advisers must have a relevant degree or a degree approved by the Board, must successfully complete board-approved courses in Australian taxation law and commercial law, and have 12 months full-time relevant experience in the preceding five years.
Option 2: Diploma or higher award
As well as a diploma (or higher), advisers must complete the board-approved courses in Australian taxation law and commercial law, and have 18 months full time experience in the preceding five years.
Option 3: Work experience
An adviser must have the equivalent of three years’ experience over the past five years, and successfully complete the above law courses.
Option 4: Membership of a professional organisation
If an adviser is a voting member of a recognised tax advice association, they may become registered by completing the law courses and having 18 months full time experience over the past five years.
The courses in Australian taxation law and commercial law should be, at most, 100-130 hours each – equivalent to one subject, or a semester’s full-time work load.
Rantall says the proposed requirements provide an uneven playing field. Currently, to be registered as a tax agent, a person does not need to complete the law courses if they are a member of a professional association, including the FPA, and have eight years full-time experience in the preceding 10 years.
The FPA has questioned the need for a commercial law subject, which was not proposed in early consultations. “We believe if there’s any competency requirement, it should only be significant to tax, not commercial law.”