The Australian Securities and Investments Commission (ASIC) does not favour the reintroduction of the accountants’ exemption and has rejected the idea accountants provide better advice for consumers than financial planners as a reason for its reinstatement.
ASIC made the comments as part of its submission to the Tax Practitioners Board (TPB) review when commenting on the seven options presented for the regulation of tax financial advisers (TFA), which it currently shares with the TPB under a co-regulatory model.
Commenting on a range of regulatory options presented in a Treasury discussion paper released in August as part of the TPB review, ASIC stated it would not support the reinstatement of the accountants’ exemption allowing advice regarding SMSFs.
The regulator added it would also not support an exemption that meant accountants could give financial product advice without having to comply with the Australian financial services licensing regime, including where an accountant was registered with the TPB.
It said it did not support these exemptions “as they are distortive and do not lead to a level playing field for accountants and other advisers”.
“Further, they would result in an inappropriate level of regulation, and corresponding consumer protections, for what is very important advice for consumers,” it said.
It also rejected the idea a higher quality of advice from TFAs or accountants was a reason to reintroduce the exemption.
“We note that through our work, we have not seen evidence that TFAs or accountants provide more compliant or better financial advice for consumers than other financial advisers and so do not believe that concessions from the financial advice regime for accountants can be justified on this basis,” it said.
It pointed to the final report of the financial services royal commission, which noted financial services was a complicated industry and “much of the complication comes from piling exception upon exception, from carving out special rules for special interests”.
Rather, it gave its support to a model where it would operate as a ‘one-stop shop’ for the regulation of financial and tax advice, and the TPB would have no direct role in the regulation of financial advisers, which it claimed would reduce the regulatory burden and overlap for advisers.
The ASIC submission pointed out that under this model, TFAs would only be required to meet ethical and education standards set by the Financial Adviser Standards and Ethics Authority and not the code of conduct in the Tax Agent Services Act and the education requirements of the TPB as well.