Those institutions which have left financial advice should still be forced to pay their share of regulatory costs, according to The Advisers Association (TAA).
As the Australian Securities and Investments Commission (ASIC) regulatory levy was increased significantly for another year, the organisation felt major banks and institutions should pay their share. The levy had increased by $712 from the previous financial year.
Neil Macdonald, TAA chief executive, said that in leaving the industry, the major banks had left smaller advisers to foot the bill for their mistakes.
“We understand that ASIC's hands are tied in relation to cost recovery, and we are not opposed to a user-pays model, however the users who caused the current regulatory cost burden are not being made to pay for it,” Macdonald said.
“By exiting advice the big banks, despite being largely responsible for some of the poorest behaviours, are able to avoid paying.”
As firms were being asked to pay $3,138 per adviser, Macdonald suggested imposing an exit fee for the major banks that had exited advice networks or were in the process of doing so. This would be a fee calculated as a three-year multiple of the adviser levy per adviser based on their adviser numbers at the time of the Hayne Royal Commission.
This would be around $10,000 per adviser, he said.
“As we said earlier this year, expecting small business advisers and ultimately their clients to keep paying ever-increasing costs for the sins of the past, largely committed by the big end of town, is unconscionable,” Macdonald said.