The Financial Planning Association (FPA) has called for financial advice to be made tax-deductible.

“The precedent of tax-deductibility of professional fees is already set and allows consumers to deduct fees paid to registered tax agents, business activity statement agents and lawyers,” the association says in its federal budget submission to Treasury.

Financial advisers must register with the Tax Practitioners Board from July 1, and will therefore become registered tax agents, the FPA argues.

“Currently, a fee-for-service arrangement for the preparation of an initial financial plan is stated by the Australian Taxation Office as not tax-deductible,” the submission says.

“Consumers are paying for personal financial advice in varying ways that result in different taxation treatments for no apparent public benefit. This variety of treatment appears to be contrary to the Australian Taxation Office’s obligation under the taxpayers’ charter it adopted in November 2003 to treat taxpayers consistently.”

The FPA says the lack of a deduction is a disincentive for people considering managing their finances.

“This has widespread cost implications, both for the individuals and the community as a whole. Encouraging the use of professional financial planning advice results in a more financially literate community and benefits society overall.”

The FPA wants initial financial plans to be tax-deductible, as well as ongoing management or an annual retainer fees.