The Australian Securities and Investments Commission (AISC) issued nearly 100 new Australian Financial Services Licences (AFSL) related to personal financial advice in the past year and spent $411 million despite only receiving $350 million in funding.
ASIC’s spending was offset by it raising $717 million for the Commonwealth in fees and charges, an increase of 8 per cent in 2012-13. This kept pace with the 7 per cent increase in spending in the same period, which was driven by increased responsibilities for enhanced market supervision and implementation of the Stronger Super reforms.
In its annual report, ASIC stated that its appropriation revenue was up from $304 million in 2011-12 to $350 million in the past year. The increased revenue related to funding for ASIC’s new responsibilities for supervision of Australia’s financial markets and implementation of the Stronger Super and Future of Financial Advice reforms.
The industry regulator also stated that in issuing the 97 new AFSLs it had visited with 24 of licensees “with a view to educating and informing advisers from the outset” and “to build relationships and to help them understand and meet their obligations”.
ASIC stated these visits were used to gather information about the business models, advice processes and risk and compliance systems of the licensees, and would continue in the coming financial year.
These visits were additional to a series of proactive surveillance activities which focused on self-managed superannuation funds, capital guaranteed products, and advice groups within the top 21 to 50 licensees.
ASIC stated it also cancelled 20 licenses as the result of reactive surveillance work stemming from reports of alleged misconduct, six of them forcibly for failure to comply with the obligations of a financial advice business.
It also banned four advisers, imposed licence conditions on two licensees and cancelled 14 licences at the request of the licensee.
