Adviser takes ASIC levy complaint to Commonwealth Ombudsman
The tripling in the Australian Securities and Investment Commission (ASIC) levy has resulted in veteran financial planner lodging a formal complaint with the Commonwealth Ombudsman lamenting that the increase risks making his business insolvent.
Reflecting the fact that ASIC chair, James Shipton suggested advisers could seek hardship relief, the adviser, Ross Smith, said he had sought that relief from the levy declaring that it represented a “hardship burden” for his business to forego $24,388 in working capital.
His letter to the ombudsman suggested that in imposing the increased levy on small financial planning businesses, ASIC was effectively “shooting the wrong dog” when it was the banks and AMP which had arguably generated the increased compliance work pursued by the regulator.
What is more, the adviser pointed out that he had complained to ASIC that to meet the cost of the increased levy, his firm would have to increase its annual Adviser Services Fees on retirees’ superannuation accounts by around 50%.
The complaint to the ombudsman’s office pointed out that the in the case of the self-licensed business run by the adviser, the ASIC levy had risen from an invoice totalling $8,349 in 2017-18 to $13,583 the following financial year and to $24,534 for the current period.
“Note the tripling of the levy from 2017-18 to 2019-20, which our small business has no means to control in our management accounting in the budgeting for small business survival,” his letter to the ombudsman said.
It then went on to question why a small, self-licensed financial planning business which had had no relationship to the major banks or AMP should be made to pay an increased levy generated by ASIC’s activity against those same big banks and AMP.
“To be clear, Shenton Limited is a self-funded AFSL [Australian financial services licence] licensed small business and has never been owned or influenced in any way by these big five or other financial services institutions,” the letter to the ombudsman said. “Bank salaried product sellers on incentive bonuses took clients from us without giving quality financial planning advice and we did not find out until after the transactions were completed, so there was no opportunity for a counter-balancing review to be undertaken.”
“As such it appears an unfair hardship to ask small businesses like Shenton Limited to bear costs incurred due to the improper behaviour and misconduct by big bank-institutions in the industry, as there is limited comparable risk born by the regulator in this case,” it said.
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