Financial Planning

Tax-deductible advice a consideration

Tax deductible advice

The government is thinking through issues related to making financial advice tax deductible in the near future, a member of parliament has said.

The federal government has declared it is considering the merits of making the costs incurred from receiving financial advice tax deductible for Australians.

Speaking at the Association of Financial Advisers national conference, Vision 2020, last week, Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume revealed: “I’ve got to admit it is something that is worth considering, getting at least the calibration of a potential tax deduction for financial advice right.

“I think that’s important.”

To this end, the assistant minister noted the level of feedback she had received from the community at large regarding the critical role financial advice plays for Australians.

“I’ve done so many different [presentations], whether it be online forums or conferences or whatever they might be, on so many different issues, whether it be superannuation or the retirement incomes system or financial technology, whatever it might be, and so often the answer turns to financial advice. Accessible, affordable financial advice,” Hume said.

“[And] I think you will find there will be a new level of focus, particularly as the retirement incomes review is released, particularly as those Hayne royal commission recommendations start to unfold, that there will be a new level of focus on the value and the importance of the financial advice industry in the next year or so.”

According to Hume, the financial planning industry will not need to suffer any further pain to enable its future to be defined.

“This is an industry that has been through such an extraordinary period of transition and I think like no other that I can think of. The fact that it has moved and evolved from the ‘80s and early ‘90s where it was [dominated by] a sales culture through to that professionalisation and … we had the banking royal commission which was reputationally very damaging, unfortunately so,” she said.

“I’ve worked in financial advice and I know overwhelmingly the vast majority of people are highly ethical and provide such good-quality service to their clients.

“It has been a time of great emotional upheaval, on top of that period of time of professionalisation of the industry and overburdensome regulation that’s come with it, [and] I think that now we’ve probably passed the worst and we’re seeing the light on the other side.”

During the same address, she said she was optimistic about the future of the financial advice sector.

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