Occasionally, you are fortunate enough to land on a table with a bona fide conspiracy theorist at a lunchtime financial advice industry event.
And it happened to me last week!
The rule book on ‘safe conversation’ topics was firmly thrown out the window on this day once an intricate conspiracy involving the FPA, CPA, ASIC and the Tax Practitioners Board (TPB) was put forward by ‘John’ (not his real name).
This was obviously going to be a unique lunch. I sat back, buckled up, and watched John take control of the table….
First, here is a small bit of important context.
Round 1 – Bring Accountants into line
Accountants have approximately 3 more weeks until the famous ASIC endorsed “Accountants Exemption” ceases. After July 1st 2016, Accountants that provide clients advice on their SMSF’s will be required to hold a limited license under an Australian Financial Services (AFS) licence. ASIC’s rationale is quite simple. SMSF’s are considered a financial product like any other super product. Because Financial Advisers need to be licensed to provide advice on financial products, it logically stands accountants also should. Many Accountants have had to complete Monarch Institute’s RG146 SMSF course or another education provider’s course to meet the new ASIC education requirements.
Round 2 – Bring Financial Advisers into line
There was general consensus on the table that the ‘Financial Advice’ sphere was converging with the Accounting tax advice space, and it would be accelerated by the regulatory and licensing changes enforced upon Accountants. Those ideas are certainly not ‘controversial’.
The conspiracy thesis
The conversation really started to cartwheel out of control when the rationale behind the Tax Practitioners Board’s (TPB) new requirements as of January 1st 2016 for financial advisers to be licensed as Tax (Financial) Advisers was tested. For some context, the TPB want Financial Advisers that provide tax advice on “virtually all advice” (i.e. tax benefits of salary sacrificing into superannuation) to be appropriately licensed with the TPB. Some Financial Advisers need to complete a Tax (Financial) Advice Course as a result.
But is it a regulatory land grab?
According to John, a secret “land grab” is underway between ASIC and the TPB – both trying to retain control of two industries that are converging. More over, education exemptions for advisers with six years of experience and membership with an Association was “a back room deal” struck by powerful membership bodies like the FPA and AFA with the TPB. Heck, John’s position was “it was a job for ICAC “!
As the details were hotly debated at the table, logic took a back seat to a conspiracy theory that while fun to entertain, lacked substance at every turn.
Doctors and lawyers routinely go back and undertake formal training after they are admitted to practice. This is over and above normal CPD they undertake as a requirement to maintain their practicing licence.
Accountants and Financial Advisers shouldn’t be different, and the regulators are saying as much. That is a good PR story! Dog grooming isn’t a regulated industry like financial advice for a good reason. The public hold Accountants and Financial Advisers in high regard for a valuable service to the community. Let’s celebrate that.