The increase in the Australian Securities and Investments Commission (ASIC) 2019/20 levies for licensees was the result of funding, an increase in the regulator’s costs, and the declining number of financial advisers.
In an answer to a question on notice by Liberal backbencher Andrew Bragg, ASIC said the Government increased its budget by $404 million over four years meet the level of regulatory activity as a result of the Royal Commission findings.
“The Government agreed at the time of increasing ASIC’s budget that the additional funding would be recovered under ASIC’s industry funding arrangements,” it said.
“Against this backdrop of additional funding and increase in ASIC costs, the total number of financial advisers decreased 17% from 24,919 in 2018/19 to 21,308 in 2019/20.
“The levy for licensees who provide personal advice on relevant financial products to retail clients comprises:
- A fixed component of $1,500 per licensee; and
- A graduated levy component calculated by reference to the number of advisers authorised by the licensee.
“A combination of an increase in total costs to be recovered, and a decrease in the number of advisers year-on-year, resulted in the graduated levy component increase from $1,142 in 2018/19 to $2,426 per adviser in 2019/20.”
Comments
That simply makes no sense at all - if there are fewer advisers to supervise, surely ASIC requires less resources not more.
Another Government Dept who is not accountable it seems to anyone for the regulatory statements (read tripe) they want to put out.
It’s a pity that those who work for ASIC don’t appear to come with any world experience - instead they are stuck in their own bubble, believing their own version of how the world is.
ASIC will be judged very poorly in history.
LNP killing Advisers yet again.
Advisers are ASIC’s legal funders. Why not litigate hey ASIC as you don’t pay the cost the Advisers do.
Yet any proceeds from Adviser funded litigation go to consolidated revenue and not to pay ASICs costs.
What a disgustingly unfair system Frydenberg has imposed on Advisers.
Frydenberg is a total wrecking ball to Advisers and Advisers need to get rid of him.
Frydenberg must GO !!!!
So with the increase in professionalism, the decrease in so called cowboys and overall decrease in adviser numbers, how can costs go up? Clearly we're still paying for the big players, and it becomes clearer why they dropped their licenses and threw out their advisers. Why pay for a levy when you can exit for a few years and go back with intra fund, general and roboadvice. ASIC is proving itself to be corrupt.
What’s the odds that cost control is as tight as funding relocation tax expenses for $100k+
None of you get it !
This is concerted effort by the government and anyone on the 'Left' side of politics to get rid of financial planners completely.
Having less advisers only exacerbates the financial planning profession's position.
ASIC based their 'war chest ' adviser levy on specific numbers that they thought they might need to prosecute now and in the future.
None of these 'rocket scientists' counted on the detrimental effects caused by LIF legislation, FASEA , PI and other ancillary costs including professional organisations (TPB ) increasing their fees ,would result in the exodus of advisers leaving.
To be clear, none of these people care and what's more they will continue on this path because they have no idea of the consequences.
If any of you think this is getting harder, start looking what else is in store for us with no material benefit to clients.
Good luck to the last man/woman standing, you're going to need it.
Hey Aleycat, you'd be surprised how many of us "get it" and good for you for pointing it out. Eliminate planners, take over the trillions of $ invested. Advice gets in the way of Government wanting to get their hands on this pile of money, so eliminate advisers. Then bring in mandatory lifetime pensions with no residual value and welcome to the rest of the world. The Governments in Europe all have your pension money you've paid a lifetime into. Or look up the CPP (Canada Pension Plan). Australia I think is one of the only countries where your retirement saving actually belong to you. This keeps Canberra up at night.
Are you all for real? It’s comments like this that burn our burgeoning profession. I’m not on board with limitless ASIC levies etc but I’m also not wrapping my head in tin-foil. I was privy to a Conference with trustees form large super funds, they openly admit they don’t know their members/clients like we do and we are in the box seat to provide that advice. So level up, accept the BS and get on with getting on or bail out. If you do bail out - let me know, I’ll gladly acquire your investment clients because I believe in what we do, and it’ll be a cold day in hell before I let an ASIC Bill get in the way of that.
none of us are bailing here either, and we've passed and exceeded everything thrown at us including having our own AFSL. the ASIC levy increase is a background irritation at best compared to our PI insurance with zero claims. We've just discussed our 10 year plan with our team and we wouldn't be doing this if we felt there was no future. what's good about these comment sections is that the variety of opinions reflects what people are thinking in our profession as they sit at their desks working for their clients. thoughts that come to mind right now, and not idiotic 30 minute + surveys with 1 - 10 on every question. I doubt you or I would agree with every comment for maybe even most of them, but I also know many of our colleagues struggle to see the light at the end of the tunnel. If our professional organisations read more of these comments maybe their efforts would focus more on us. And I appreciate your insights on super fund trustees, that's valuable information to share.
So what if we get down to 1000 advisers - boy I hope they have very very deep pockets!
Even the New York mafia did not increase their protection demands on the remaining shops when shops closed in the depression. And the mafia did not contribute to the closure.
If you have less "customers" you make some cutbacks....you don't increase prices....time to make some ASIC staff redundant.
The extortionate levy is charged even after you cancel the licence because you cannot afford it. Extortion on a grand scale for precious little service. Wish I could charge clients thousands of dollars for doing absolutely nothing.
When is someone in Canberra going to wake up???? I won't be the last man standing because I'll be out of business next year. This whole business of advisers funding ASIC is stupid. I didn't mind paying fees to file my annual licensee financials, or to have records updated, because that's fee-for-service, but this business of having innocent advisers paying to have ASIC pursue the guilty, then putting the fines back into consolidated revenue is just highway robbery.
Ignore what the Govt says about Australians getting affordable advice. There is no longer any such thing. Watch out for all sorts of Govt messing with super and trans-generational wealth in the near future, when there's no longer any advisers left.
This Federal LNP Govt is inept
ASIC has shown its self to be an organisation run by a bunch of morons, the royal commission pointed this out yet a dumb government gives them more money to become more incompetent, and all it does is then screw advisors for more money not cut its cost, looks like a episode of YES MInster.
Except that YES Minister was funny.
So the advisers that have managed to stay in business despite the best efforts of the regulator and the Government are subsidising the advisers that have left the industry? ASIC just doubled the cost to the remaining advisers and they think is is OK?
I think what is lost in this saga, is that we are easy pickings, the scapegoat and low-hanging fruit to show that ASIC and the Government are tough on the Financial Services, While I agree with Alleycat. the idea of removing advice is just plain crazy, but it is the aim of the government. We are easy to kill off because the enemy has always been in our ranks. Most of our associations are compromised with conflict of interest with Founders and Sponsors being the very businesses who's actions lead to the RC. They walked away and it easy for ASIC to smash an individual adviser because it is easy to keep digging to find an admin error in a practice. But the point of the article is about the rising cost of ASIC. Even after a 40 minutes conversation with ASIC, who informed me about "it was all about the surveillance". I believe it is all about getting the same amount of money out of an every reducing adviser base. I plan to continue in the industry but i see bleak times ahead.
most everybody who is in the industry as you and I with 20 years plus is just sick to death of this. I am glad the accountants are throwing in the towel. once the numbers get below 15,000 at the end of the year the levy will need to increase again and that will be the end for me and many other small practices.
I think adviser ratings are forecasting 16,000 at the end of this year, and one or two are forecasting 5,000 by 2026, I think the 5,000 forecast is probably the correct number.
it's a complete disaster. so many duplications and the middleman - the dealer group structure - is just not workable anymore.
The last adviser standing is going to be paying for thousands of ASIC employees.
That's a good result. LOL
The govt should pay 100% of Asics costs bot advisers. Asic do nothing to help advisers.
A 112% increase to cover a 17% drop in adviser numbers. Makes total sense.
The drop in numbers should see a commensurate drop in oversight required. Unless of course the oversight isn't done per adviser, in which case why should the fees be calculated that way?
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