An adviser collective with more than 3200 members will begin a campaign to make financial advice fees tax deductible, claiming the move was consistent with attempts to professionalise the advice sector.
XY Adviser co-founder Clayton Daniel said the group’s aim since starting in 2014 was to drive the positive evolution of advice, and changes to the profession stemming from the financial services royal commission and the requirements of the Financial Adviser Standards and Ethics Authority (FASEA) were also pushing in that direction.
As a result of this shift, Daniel said advice needs to be treated like a profession and granted tax-deductible status so advisers can continue their development.
“FASEA is demanding higher education standards and the royal commission has restricted traditional income generation. All these additional restrictions and requirements are pushing towards one purpose – professionalism,” he said.
“We are more than happy to support this move towards professionalism, but we expect advice to be treated as a profession. Financial advice clients deserve the benefit of tax-deductible advice. This will offset rising costs of financial advice fees and also provide a clear path for more Australians to receive advice.”
He said XY Adviser will form a working group, gather feedback and input from across the advice sector and approach the government about making the change.
“We’ve approached our 3000-plus strong community directly and have already had key licensees agree to back our agenda of tax-deductible advice. The good news is, with the support we have across the industry, we think we can win this battle,” he said.
The addition of tax-deductibility status for financial advice would offset some of the recent struggles advisers have had to work through, he noted.
This would occur as the government would be subsidising a client’s advice, which would, in turn, make advice more affordable and accessible and offset the additional costs and requirements faced by advisers under the new education and standards regime, he noted.
“From a non-monetary point of view, it also treats advisers like a profession. Professional fees are tax deductible much of the time and giving advisers this status is the first positive for advisers,” he said.
“Everyone is demanding advisers become a profession and this move would respect the fact that they are becoming exactly that.
“We believe it has a good chance of getting over the line as it holds the unique position of providing positive outcomes for all audiences: consumers, advisers and licensees.”