When financial advice is not tax advice...
An article in the West Australian recently highlighted how consumers and clients could easily end up much worse off despite believing they are doing the right thing and seeking financial advice.
The story concerned the Governments planned financial planning reforms and the effect of a year long deferral of the application of consumer protection laws governing tax agents to financial planners. The deferral means that some financial planners give advice that they may not have the expertise to give.
One quote noted that an industry source was "appalled at how several big superannuation firms had taken advantage of financial planners ability to give tax advice." The article also made reference to outsourcing which is where work is typically sent overseas to be done at a cheaper rate than it can be done locally. The fees charged however are still the standard local rates and often consumers are none the wiser. Consumers can find themselves in mess if a financial planner refers tax work overseas to be done but the planner is not involved in confirming the quality of the work. If errors are made how do you deal with a company that is thousands of kilometres away?
The reality is that financial planners are not accountants and their ability to give clear and accurate tax advice should be accepted with a good dose of apprehension unless they have the accounting qualifications to back it up.
As always our advice is to get the best advice from the most qualified person. And in the case of tax matters that is a qualified accountant.
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