TPB education requirements could spell trouble for advisers

The fintech group’s technical and policy manager, Rob Lavery, said while the TPB’s new CPE requirements seemed on the surface to line up with FASEA’s CPD standards, the requirement for advisers to demonstrate a link between their studies and the tax services provided to clients could complicate matters.

“The consultation paper proposes that advisers who meet the FASEA-overseen CPD requirements will ‘likely’ meet the TPB’s CPE requirements, however it is not as clear cut as that statement makes it seem,” Mr Lavery said.

“The TPB’s proposed position that a financial adviser is ‘likely’ to meet the TPB’s CPE requirements if they meet FASEA’s CPD requirements, contains a caveat: any FASEA CPD activities must be able to be demonstrably linked to the adviser’s tax (financial) advice services to qualify as CPE under the TPB’s requirements.”

Given that CPE hours were increasing to 40 hours a year under the TPB’s proposals, this could mean advisers would be forced to commit a significant amount of time to tax related study, Mr Lavery said.

“The TPB has proposed to increase CPE requirements from an effective 20 hours per year, to 40 hours per year to align with the requirements of FASEA,” he said.

“If the TPB insists that all FASEA CPD needs to be related to providing tax (financial) adviser services in order to meet CPE requirements, advisers are going to be left well short of their 40-hour obligation when relying on FASEA CPD alone.”

Mr Lavery added that many CPD topics commonly undertaken by advisers would not contain a tax component, particularly given the strong emphasis on ethical topics within the FASEA educational framework.

“In the technical competence CPD area, training on topics such as aged care, social security and some investments may contain no tax component,” he said. 

“Furthermore, it is easy to see how CPD in the areas of client care and practice, regulatory compliance and consumer protection, professionalism and ethics, and in FASEA’s general category may not be viewed as directly related to providing tax (financial) adviser services.”

Mr Lavery said the caveat that all CPE had to be directly related to tax financial adviser services needed to be removed in order to make advisers’ lives easier.

“Complete alignment with FASEA’s requirements, without the caveat that all training relate to providing tax (financial) advice services, seems the only outcome that will streamline advisers’ ongoing education requirements,” he said.

“Inclusion of that caveat, along with an increase in CPE requirements to 40 hours per year, could see advisers needing to do training far in excess of 40 hours training annually to meet their twin requirements.”