Plans to transition the registration of tax financial advisers from the Tax Practitioners Board (TPB) to the Australian Securities and Investments Commission (ASIC) will still create unnecessary duplication and delay the move to a single disciplinary body, according to a major accounting body.
Chartered Accountants Australia and New Zealand (CAANZ) made the claim as part of its submission to the federal government’s consultation on the exposure draft regulations and a draft legislative instrument that support the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021.
The bill, which recently passed through parliament, creates a single disciplinary body and new registration system for financial advisers, including those who provide tax (financial) advice services, and will require the latter to be moved from the oversight of the TPB to ASIC.
In its submission, CAANZ claimed the transition of tax financial advisers from the TPB to ASIC needed more work to ensure the registration system operated effectively after the transition.
“The proposal introduces unnecessary levels of duplication and complexity with the tax relevant providers moving to ASIC and those who remain under the TPB,” the submission stated.
“Further consideration should be given to whether a level playing field is being created between those financial advisers registered under the TPB and ASIC.
“CAANZ believes this is an important component of the operation of the overall advice process. It is therefore imperative to ensure this aspect of the legislation is constructed and implemented correctly with due consideration to all stakeholders to ensure smooth transition and achieving the intended optimum outcome of the bill.”
CAANZ added that since this change was unrelated to any recommendation from the Hayne royal commission, it should be removed from the bill to allow the uninterrupted passage of the remaining elements related to the single disciplinary body, the winding up of the Financial Adviser Standards and Ethics Authority and the registration of financial advisers.
In a separate submission, CAANZ, in conjunction with CPA Australia, restated their view that the creation of a retirement income covenant for superannuation funds was unnecessary and would increase costs while providing no benefit to fund members, trustees, regulators or the government.
The submission pointed out proposed retirement income covenant requirements for a superannuation fund to consider the needs of members in retirement were already contained in general trust law obligations, the best financial interests duty, the sole purpose test, requirements regarding the formulation and maintenance of investment strategies and the new design and distribution obligations.
“Australian Prudential Regulation Authority data shows that retirees deplete their superannuation retirement savings in retirement,” the two bodies stated.
“CPA Australia and CAANZ also consider that retirees spending their non-superannuation monies in retirement is not the business or concern of a superannuation fund trustee.
“We are concerned that requirements for trustees to consider their members’ non-superannuation investments is beyond their remit.”