Expect the next couple of weeks to see a drop-off of advisers who don’t plan to complete the Financial Adviser Standards and Ethics Authority (FASEA) exam, as licensees reshuffle for the new financial year.
The funding invoice to recover the Australian Securities and Investments Commission’s (ASIC’s) regulatory costs for the 20/21 year would be released in January, which would be based on the advisers on the Financial Adviser Register (FAR) as of 30 June, 2021.
Don Trapnell, Synchron director, said advisers who were going to leave the industry at 31 December, 2021, because of FASEA would now leave earlier to avoid another ASIC levy.
“Who knows what the ASIC levy is going to be by the way – last year they forecast that it was going to be $1,500 and it came in at $2,400,” Trapnell said.
“If an adviser leaves a licensee, goes somewhere else or leaves the industry, that licensee would quite rightly charge the adviser what the ASIC levy is going to be.
“The ASIC levy is calculated as a levy based on the number of authorised representatives in the licensee as at 30 June each year, but it is not charged to the licensee until January, so that six-month period – half a year – any adviser that leaves, the licensee wears it.
“So, an adviser who is thinking of leaving the industry at the end of the year or struggling with the FASEA exam is now going to be pushed forward into a decision and we’re going to see an ASIC FAR report that is going to be decimated on 1 July.”
Colin Williams, Wealth Data director, said 30 June was often the key period for making substantial changes to business.
“Very often that means letting advisers go and making those changes because it’s nice and neat and fits into the tax year,” Williams said.
“It’s always quite volatile and the last couple of years we’ve seen a huge spike in the number of advisers leaving.”
However, licensees had up to 30 days to inform ASIC of changes to its advisers, so it could be the case that the numbers would be spread out over the next couple of weeks.
“For this week’s figures, everyone is expecting a huge loss and I am expecting it to be quite high, but the numbers could be lessened,” Williams said.
“The majority tell them almost straightaway what is happening, but because [the updated numbers are happening the very next day after 30 June], they might not tell ASIC until Friday or later.
“I still think it will be pretty bad, most are pretty good at telling ASIC straight away because it’s all done online, but this Thursday’s figures could be a bit blurred because not everyone has reported yet.”
Last week’s update from Wealth Data saw 112 advisers leave the industry.