ASIC levy to push advisers to exit before end of financial year

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.

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“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.




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ASIC want to make the industry untenable for Financial advisers and the ASIC levy is just another way of doing so. I expect to lose 25 advisers leading up to 30th June so that they do not need to pay another ASIC Levy. With COVID the costs of FASEA the rape of the industry by the increased ASIC Levy last year was the final straw. Senator Hume will have her way when the industry is forced to turn to the institutions and industry funds to "save" it because everyone looking to work for the client not the Product has been priced out of business.

I don't think they understand this is even happening. until it happens and is too late. by the end of the year, there could be something like 5,000 exits

Relax bud, Senator Hume reads money management comments first thing each morning - she is absolutely dialed in....Seriously, though, I know it's hellish but just ride it out. The insto's will be fighting to scoop up the remaining advisers if they get back into the market. If running a small biz becomes unsustainable, there will be plenty of high paying jobs available for the remaining qualified advisers - with no sales targets by the way.

Nothing I haven't been saying or posting for months. Apparently, its now news.

okay, all of you don't come out of the woodwork to take credit for the one and only correct prediction, from The Oracle. remember The Oracle made a bold prediction that will come true beginning 1 July 2021 onwards.

the oracle, always right, it's so wrong.

So , lose 6 months worth of income to avoid a $2-$3k levy?

buddy, a lot of the "advisers" are limited license holders, they may do 1 or 2 SoA's pa to establish an SMSF, for example, they may have an SME who is buying a BRP. a lot of them also wanted to be licensed and have general conversations with clients (legally) they are the ones leaving. cost-prohibitive, not worthwhile anymore. better not to be licensed.

there are also thousands of others who are ARs and would be considered mostly inactive because they have reduced their work in the FP space over the last few years significantly, FP was an adjunct to their accounting or mortgage broking business. it made sense from a whole of firm perspective (even if FP was loss-making), but they are all exiting now.

as are mature full FP's and also more than 1,000 who already have the fasea degree and passed the exam. so it's now become a stampede to exit rather than an exodus which in turn is seeing the likes of count financial lose about 100 AR's in the span of 12 months. that's why rowe is panicking and trying to put the fear of god into his ARs and taking cheap shots at others.

similarly many dealer groups just at the margins will also exit adding to the death spiral that is underway. make sense?

collapse is imminent.

The ASIC levy = fee for no service

Certainly no benefit to us from ASIC... the rape of our industry goes into consolidated revenue.

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