ASIC funding model targets innocent advisers
The Australian Securities and Investments Commission’s (ASIC’s) industry funding model bill does not provide discounts for advisers who are doing the right thing and risks increasing the cost of providing advice, according to the Association of Financial Advisers (AFA).
The association’s new chief executive, Philip Kewin, said the ASIC Supervisory Cost Recovery Levy Bill would pass costs on to all advisers including those who were adhering to ethical and professional standards.
“There are currently no provisions to provide discounts for those advisers who were doing the right thing,” Kewin said.
“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 was also concerned that unless costs were capped, it would not limit the costs passed on to advisers.
“The AFA recognises and is an active participant in measures to ensure the highest professional standards are maintained to protect the consumer,” Kewin said.
“But measures should be practical, affordable and reward excellence.”
Along with discounts for advisers and capping of increased costs, the association also called for a minimum five-year review. In its submission to Treasury on the bill, the AFA said increased costs of providing financial advice could make it inaccessible for those who needed it.
“Financial advice should not just be for the wealthy and this model should not unintentionally facilitate that outcome.”
The funding model bill, which would seek to recover costs of monitoring and remediating poor advisers from the industry, was introduced into Parliament yesterday.
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