Australia – Financial Services – Offering tax advisory services to clients with an AFSL

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Regulatory Requirements for Tax (Financial) Advice Providers in Australia

In a recent development in the financial services industry, all Australian Financial Services Licence (AFSL) holders and their Authorised Representatives (ARs) providing tax (financial) advice to retail and wholesale clients are now required to be registered as a tax agent with the Tax Practitioners Board (TPB) or recognized as a qualified tax relevant provider.

This new requirement aims to ensure that individuals offering tax (financial) advice possess the necessary qualifications and authorizations to provide such services. The TPB maintains a register of all registered tax agents, while ASIC has developed the Financial Advisers Register listing individuals or entities providing personal financial advice to retail clients.

Consumers seeking tax (financial) advice are encouraged to verify the registration and authorization of their advisers through either the TPB register or the ASIC Financial Adviser Register to ensure they are dealing with professionals who meet the necessary standards.

The definition of a tax (financial) advice service includes various elements such as providing advice on tax obligations, financial products, and services that clients rely on for tax purposes. Individuals intending to provide tax (financial) advice must meet specific eligibility criteria and registration pathways outlined by the TPB.

For companies or partnerships offering tax (financial) advice services, there are additional requirements to ensure compliance with regulations. Failure to register properly can result in significant penalties for individuals and entities providing tax advice without the necessary authorization.

The regulatory landscape for relevant providers offering tax (financial) advice services is governed by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021, which came into effect on January 1, 2022.

Overall, the new requirements aim to enhance the professionalism and accountability of individuals providing tax (financial) advice to clients, ensuring that they meet the necessary standards and qualifications to offer such services.