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.

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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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Ross says it all with this one line: “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.” Third line selling is alive and we're paying for it. We're in the same situation. the levy increase goes against the very grain of where our post-institution profession was supposed to be heading. As a small self licensed firm we feel your pain Ross, and all respect to to actions.

Great letter Ross Smith, as another small business, never insto owned or aligned AFSL we have also seen our Double Taxation ASIC Levy Triple.
Multiple calls and emails to MIA Jane Hume achieve nothing.
Very Interested to see Ombudsman’s response.
Advisers should take ASIC to AFCA.
Or ALL Advisers should REVOLT and ALL refuse to pay.
Disgusting, corrupt, convoluted, over regulating ASIC are a total disaster to Real Advisers and Affordable Advice for mum and dads that need our Advice.
And now ASIC pocket and publish their $160 million fines $$$$$ bonanza just as the Levy theft is due, why can’t $160 Million be taken off Adviser Levies ???

"why can’t $160 Million be taken off Adviser Levies ???"
That is my question also. Surely the fines that were paid in relation to the extra cost should be used to pay for the extra costs, not become a profit item!

Just going to their bonus this year.

And how much of those fines will be passed on to the "consumer groups" cartel, like Choice, as a Community Benefits Payment? Disgrace.

This Fed Liberal Govt is beyond inept. The way they are managing office, you would think the Libs were in Opposition already. Frydenberg simply has to go. Just a complete waste of space.

Well done Ross, these government charges are excessive, and must be reigned in. Feds should look at reforming the taxation and welfare system, rather than increasing levies.

Never has any industry been subjected to increased fees & levies, increased education standards, increased public flogging. We have had so many in our industry suicide and go bankrupt yet nothing, no investigations no one saying enough is enough. We are like the drug mules walking through customs with the stuff strapped to our guts having to answer for the sins of many, while the cartels shut up shop pocket the money and move on! Just an absolute disgrace!

Gutsy move - good on him!

Congratulations to Ross for having the courage to write the letter he did. I totally support his views. Honesty and integrity in financial advice means less than nothing to the regulators, the Govt, and the banking sector. How long is it going to take, and how many more advisers and businesses will go to the wall before anyone notices the devastation and havoc being wreaked in this space?

ASIC said because I have lodged my Complaint with Commonwealth Ombudsman with emailed copy to The Office of the Senate for Joint Parliamentary Committee of Financial Services, ASIC reported that I do not have to pay the Levy on Friday 23rd and no additional penalty while my complaint is being investigated. If you email me [email protected], I will email a copy of the Ombudsman's letter for you to use as a template and submit your own online complaint using the same ASIC Case number. My letter was a lot more biting than shown in this article, highlighting misplaced conflicts of interests (sic) by the designers of Industry Funding model. Ombudsman is the legitimate way to do push-back against the ivory tower and if it goes weak, the next legitimate way is to appeal to Administrative Appeals Tribunal. Lodging complaints is the only way for small adviser firms independents to be respected by the ivory tower.

Great effort Ross.
I'd love to see the letter but am SH#T scared it will end up in a Dover style assassination to our AFSL for sticking your head up.

Admirable effort. I would love to have the guts to participate as I am incensed about this disgraceful lever, but like others I fear being targeted and victimised by the regulator because they know us small AFSLs don’t have the balance sheet to deal with interacting with them.

they'll find a way to ban him.

The Australian FP industry is a classic example of how the real culprits escaped and the scape goats were caught in a legally managed entanglement of regulatory affairs, and even now nobody 'up there' knows what's actually going on...

sorry correction: [email protected]

My business had its levy hiked to $110,000 and we don't even give personal advice, only general. It's the single largest cost we have and it's severely damaged us to the point we are struggling to keep it going this year. The levy along with the covid one punch attack is devastating.

Thank you for taking a stand Ross Smith.

Salaried advisers including those in big banks on incentive schemes to push-sell bank products that was subject of Hayne Royal Commission investigation that caused the major proportion ASIC's Enforcement costs, are not registered as Authorised Representatives and Financial Advisers Register, therefore those numbers are not included in the denominator of Industry Levy model in the calculation of the 2019-20 levy on AFSL's Registered Advisers. In my submission to Commonwealth Ombudsman, I alleged the model produces spurious results. I now think there should be an injunction should be submitted before the Federal Court against the Industry Levy model that calls for an Independent Investigation, not ASIC, not David Murray, where in my submission to the Commonwealth Ombudsman I suggested the Australian Government Actuary or Judge Jayne Jagot, who are obviously not conflicted. If you email [email protected] I can provide a copy of submission to the Commonwealth Ombudsman.

Thank you Ross for all that you are doing!

they are gonna get him. and jam him. they need heads on sticks. Joe Longo and Karen Chester need someone to blame and Ross Smith sounds like a good one.

such a generic name, the public will be appeased. Ross Smith. evildoer and financial planner. GET HIM!

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