AFA concerned about ASIC funding model
The Association of Financial Advisers (AFA) has raised concerns about the Australian Securities and Investments Commission’s (ASIC’s) new funding model designed to help recoup costs of monitoring and remediating poor advisers.
According to the AFA, this model would pass costs on to all advisers, including those who acted professionally and ethically, making the process more expensive for ordinary people seeking advice.
Therefore, the AFA was calling for discounts for advisers who “do the right thing”, as well as a capping of increased costs and a minimum five-year review.
The AFA also said that any further increase in the cost of providing advice is likely to put quality financial advice out of reach for those who needed it most.
AFA’s chief executive, Philip Kewin, said: “There are currently no provisions to provide discounts for those advisers who are doing the right thing”.
“This seems unfair, particularly when all advisers have already had to bear a raft of costs, including increased professional indemnity insurance premiums and costs associated with upgrading Fee Disclosure Statements and incorporating opt-in arrangements.
“The AFA recognises and is an active participant in measures to ensure the highest professional standards are maintained to protect the consumer, but measures should be practical, affordable and reward excellence.”
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