Early in January 2023, ASIC issued an announcement that they were going to be publishing a financial adviser’s tax (financial) advice status on the Financial Adviser Register (FAR) from 1 February 2023, and emphasised the obligations on licensees to update this information on the FAR.
The 2021 Better Advice Bill, removed financial advisers from the regulatory oversight of the Tax Practitioners Board, however built tax (financial) advice requirements into the Corporations Act. These changes also introduced the concept of a Qualified Tax Relevant provider (QTRP).
QTRP’s are subject to new education and CPD requirements. The education requirements, subject to certain exemptions and deferrals (discussed below), are the completion of AQF level 5 (diploma level) courses on Australian Taxation Law and Commercial Law. The CPD requirement is five hours of tax relevant content per year, which is built into the existing requirement of a total of 40 hours. This effectively added a new category within the existing 40 hour total. The additional CPD requirements apply in relation to CPD years that begin on or after 1 January 2023. Thus they will apply to all advisers who operate on a calendar year CPD cycle in 2023.
In terms of exemptions and deferrals, it is important to note that a financial adviser on the FAR who was also registered with the TPB as at 31 December 2021, or who had applied for registration with the TPB at that date, however had not yet been confirmed, will be permanently exempt from the completion of the two subjects. Existing advisers (on the FAR between 1 January 2016 and 1 January 2019), who were registered on the FAR as at 31 December 2021, who were not registered with the TPB will have until the end of 2025 to complete these two courses. This relates to advisers who were not registered with the TPB, however were instead supervised by someone who was registered with the TPB. This was a model employed by some licensees, including a number of salaried licensees.
ASIC have prepared a flow chart on the classification of tax (financial) advisers.
This new regime will capture new advisers (who presumably should have completed courses that meet the requirements as part of the completion of their study), and those existing financial advisers who for one reason or another were not on the FAR as at 31 December 2021. Despite our repeated efforts to raise concern about the equity of this later group, there remains a problem, and technically they would be required to complete the two courses before they provide tax (financial) advice services.
ASIC have also prepared a Questions and Answers document in the form of Information Sheet 268.
For any questions on Qualified Relevant Tax Providers, please contact firstname.lastname@example.org.