JAWG makes the case for adviser access to ATO portal

Access to the Australian Taxation Office’s (ATO) Online services for agents portal is high on the list of issues that financial advisers most consistently argue needs to be addressed, yet there has been little movement from government.

However, the new year brought with it a Treasury consultation paper, Review of Tax Regulator Secrecy Exceptions, that has sought feedback on whether the ATO should be permitted to disclose certain ATO-held information with registered financial advisers where they are providing financial (tax) advice to their clients

“Currently, only registered tax agents and BAS agents can access ATO-held information (such as taxable income, super balance, contributions and other tax components) on behalf of a client. Financial advisers do not have access to the ATO’s Online services for agents (also known as the ATO online portal),” the consultation paper said.

“Financial advisers rely on clients providing this information to them through less secure channels (for example, a client may access information in their myGov account, download it and email it to their adviser).

“Financial advisers are responsible for the accuracy of information provided by their clients. Streamlining financial advisers’ access to ATO-held client information provides the opportunity to utilise more complete, accurate and timely data which may reduce the cost of advice by lessening the administrative burden.”

In its response to the consultation paper, the Joint Associations Working Group (JAWG) said it is “strongly supportive of providing access to the ATO portal for financial advisers”, adding that there are significant benefits for both advisers and their clients.

“This is an issue that a number of JAWG members have advocated for over a long period of time, and we therefore welcome Treasury’s active consideration of this issue,” JAWG said.

Core to JAWG and its members’ argument is that access to the ATO portal would allow the more accurate and efficient use of client data.

“When a financial adviser is working with a client to provide them with advice, including with respect to retirement, they need to do a complete fact find exercise to discover all the financial, tax, social security and family information that is relevant to that client,” the submission said.

“Understanding taxable income and the sources of that income is critically important. Superannuation is typically the largest financial asset people have, so understanding what accounts they have, how much they have and what contributions have previously been made is essential.

“Since the introduction of the Transfer Balance Cap and Total Superannuation Balance measures, knowledge of this information is absolutely critical to avoid the risk of providing inappropriate advice. Obtaining this information can be particularly challenging for clients and advisers, resulting in a material cost to each.”

JAWG added that providing the information to the adviser through follow-up with a super fund or the client accessing myGov not only increases the time and cost for advisers and funds but can also result in a “significant risk of cyber threat”.

The Treasury paper raised a number of issues related to cyber security, implementation costs, unintended or pressured access and whether timeliness of data would be assured.

“The size and sophistication of financial advice businesses – and their ability to manage cyber security risks and large amounts of sensitive information – varies widely. While there are some large firms, many financial advice businesses are small businesses who may lack the expertise and resourcing to provide a high level of data protection,” it said.

“Giving financial advisers access to client information increases financial crime risks, which not only affects the retirement savings of members, but can disrupt business operations for an extended period.”

However, JAWG argued that financial advisers having access to the ATO portal would actually reduce cyber risk, as the information can be “directly accessed and electronically transferred to a financial planning system”.

“Financial advice firms will typically store client data in financial planning systems that have strong data protection capability,” it said.

“The bigger risk exposure is with respect to the collection of this information and the transfer of this information, including via emails. Many practices are managing this risk by transitioning to using client portals to better enable the secure exchange of information with clients.”

The submission also pushed back on concerns that the data would not be “real time”, noting that the data can help make advisers aware of information that is unlikely to change in the short term.

“Further, the more recent transactions will be better understood by the client and could be otherwise confirmed by checking other sources of data. It is visibility of the unexpected that is most useful, including forgotten super funds, lump-sum contributions and previous use of bring forward provisions,” JAWG said.

“Equally an understanding of prior year Total Superannuation Balance and all Transfer Balance Cap account transactions are particularly useful.”

In its pre-budget submission earlier this year, the Financial Advice Association Australia said that by enabling access to the portal, the government would “reduce unnecessary delays and costs, ultimately supporting better outcomes for Australian consumers seeking financial advice”.