Three industry bodies believe the new tax advice regime for advisers will add considerable compliance costs for financial services companies.

The Association of Financial Advisers, the Financial Services Council and the Australian Bankers’ Association cite a lack of clarity on application of the regulations.

“The substantial compliance cost is associated with changing all regulated disclosure documents, changing internal compliance systems, policies and procedures,” they say in a submission to the Tax Practitioners Board (TPB).

“Unless the supervision framework adopts a consistent approach with the Australian Securities and Investments Commission (ASIC) regime, it could fundamentally, and adversely, impact on the provision of financial advice and other consumer disclosure material.”

The submission raises a number of areas that “potentially could cause legal problems and administrative complexity for Australian financial services licensees (AFSLs)”.

“The definition of a tax financial advice service should not be ambiguous,” it says. “The definition should be clarified in the law and subsequent guidance.”

The three bodies also argue training requirements for advisers should be integrated into current training and competency frameworks.

“It is important one aligned training and competency framework is set for financial advisers, to ensure the financial advice profession has a consistent and comprehensive… framework.

“We consider the TPB must work with the Treasury and ASIC to ensure relevant legislation and subsequent regulatory guidance is developed to address these legal, technical and practical matters.”

The industry bodies also believe the supervision requirements on tax advisers should be consistent with the compliance, supervision and quality assurance framework implemented by AFSLs.

They say legislation should be amended to adopt the licensee-driven supervision model implemented in 2002 under the financial services reform regime.