The exemption of financial planners from the tax agent services regime will be extended to 30 June 2012.
The measure was taken to allow for the development of a regulatory model which will be effective from 1 July 2012.
The Assistant Treasurer and Minister for Financial Services and Superannuation Bill Shorten met yesterday with the Tax Practitioners Board, ASIC and representatives of the financial planning industry.
They agreed on a set of principles that will be used to develop regulatory arrangements for financial planners who provide tax advice within the context of providing financial advice.
"The agreement of the key elements of a practical model will benefit the finance, tax and accounting industries," Shorten said.
"For consumers, this means they can expect to receive quality financial planning services that include competent advice on related tax issues," Shorten said.
Financial planners will have to register through ASIC with the Tax Practitioners Board to provide tax advice within the context of providing financial advice, and a public register will be created.
The scope of services that can be provided by financial planners is determined according to the type of registration held.
Registered planners will also need to abide by tax specific obligations that currently apply to registered tax agents.
These obligations would be under a code of conduct that would ensure that services are provided to consumers in accordance with appropriate professional and ethical standards.
Financial planners will also be required to have tax related qualifications to ensure that quality advice is provided and consumers can rely on this advice.
Participants of yesterday's meeting were of the opinion that the level of the qualification may be equivalent to that of a diploma.
Association of Financial Advisers chief executive Richard Klipin said that he welcomed the clarity the principles created for planners.
"Minister Shorten has held a constructive consultation process across the stakeholders and the outcome is a sensible outcome," he said.
But there were also critics within the advisory industry who argued that in the light of the myriad of legislative changes, including the Future of Financial Advice, the additional qualifications would just detract planners from servicing their clients.
A transitional framework will operate from 1 July 2012 that would enable financial planners to be eligible for a simple initial registration for a period of three years.
This period can be used to attain competencies to deliver quality tax advice as part of financial planning advice.
Treasury will continue the consultation process and expects to issue draft legislation later this year.
