FAR updated to display tax advice qualification

As of 1 January 2022, advisers who provide or intend to provide tax (financial) advice services to retail clients must meet certain new requirements, according to the Relevant Providers Determination 2021.

The Australian Securities and Investments Commission’s (ASIC) latest announcement comes after it said last month that Australian Financial Services (AFS) licensees should notify it before February 2023 if their financial advisers can provide tax (financial) services and their information is not already available on the FAR.

This information is now displayed under each relevant provider’s appointment details on the FAR published on Moneysmart.

The ASIC earlier clarified that specific courses in commercial law and taxation law must be completed to become a qualified tax relevant provider (QTRP).

The concept of QTRPs was introduced as part of the 2021 Better Advice Bill which removed financial advisers from the regulatory oversight of the Tax Practitioners Board (TPB). However, it built tax (financial) advice requirements into the Corporations Act.

While QTRPs are subject to new education and CPD requirements, there are certain exemptions and deferrals.

According to a recent update by the Association of Financial Advisers (AFA), 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 specified courses.

Existing advisers (on the FAR between 1 January 2016 and 1 January 2019), who were registered on the FAR as at 31 December 2021 and who were not registered with the TPB, will have until the end of 2025 to complete these courses.

This, the AFA said, 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.

The ASIC reminded that if it has not been notified about whether a relevant provider can provide tax (financial) advice services, the FAR will not display whether the relevant provider can provide tax (financial) advice services.

“It is the responsibility of Australian Financial Services licensees to ensure that the information recorded on the FAR about their relevant providers is correct,” the regulator concluded.