There is every indication that independent financial advisers are having to pay higher levies to fund the Australian Securities and Investments Commission (ASIC) because they are really funding the past misdeeds of the major institutions.
That is one of the key bottom lines of the Association of Financial Advisers (AFA) pre-Budget submission which has pointed to a “mysterious” increase in the level of the levy from $40.1 million to $56.2 million.
“We observe that more is spent by ASIC on the oversight of financial advice than any other regulated community that ASIC oversees and question the rationale for this, particularly when the number of financial advisers is declining so rapidly and at the same time the professional standards are being increased,” the submission said.
“We seek some clarity and transparency so as to understand what has driven this huge increase, however we presume that it could be the funding of ASIC enforcement action against some of the large institutions that were named in the Royal Commission.”
“If this is the case, then we strongly object to the proposition that small business financial advisers should be picking up the cost of court action against large institutions, many of whom have chosen to either exit the financial advice market or substantially scale back their advice businesses,” the AFA submission said.
“Many of the advisers have no choice but to pass on any increases in regulatory fees to their clients, which continues to increase the cost of advice and places advice out of the reach of everyday consumers,” it said.
“Where small businesses are picking up the cost for large institutions, this would surely suggest that the funding model is flawed.”
“We call on the Government to provide relief to financial advisers for the 2019-20 and 2020-21 years and to review the model for future years so a reasonable and sustainable levy can be maintained,” the AFA submission said.
“As a minimum, the funding levy should be pegged to the 2018-19 level.
“Whatever the Banking Royal Commission revealed about these large institutions, it should not result in ASIC being able to exponentially increase their costs or to result in an ongoing disadvantage to small business financial advisers and as a result their clients. In the context of this surprise increase in the ASIC spend on financial advisers, we believe that there needs to be a cap and changes to the framework to deliver greater transparency.”
Comments
I would say those of us left over and passing all the tests, licensing, standards etc will be paying not only for the what the big players have done in the past but already paying for what they are about to do in the future. Intra-Fund advice, general advice only? Get ready for the next RC.
ASIC hates all financial planners equally. It doesn't matter if you are self licensed, licensed through a mid tier or large corporate or bank. They hate you, and want you gone. To rub it in they are going to charge you anything they want, unchallenged, unaccountable and without any explanation of their exorbitant increases. Some of that money is going to be used to pay the personal expenses of ASIC staff. In the end only "advisers" working for their mates at the union funds will remain, who I am sure will get a carve out for paying a ASIC levy moving forward.
Except they love vertically owned Industry Fund General Advisers that are not even Advisers but uneducated Call Centre Sales staff.
And the love Industry Super Intra Fund Advisers / Sales teams.
They can All be paid by hidden commissions charged to all members when majority of members don’t get Sales Advice and the most members pay Hidden commissions for NO Service.
But we all know that anything Industry Super do is fi e as ASIC will never do anything against Industry Super. NEVER !!!!
Regulatory Capture Corruption at its Worst !!!
I would like to see a statement from ASIC as to where my money is going. Similar to the ATO breakdown of where your income tax is spent. I surely don't want it spent on corporate trainers, paying personal tax bills for people, relocation expenses from overseas and crazy stuff like that. If they are in high level executive jobs they shouldn't need more training! They get paid enough to pay for their own moving if they want to relocate to somewhere else to work, like the rest of us have to. What do these people expect a champagne lifestyle on our levies. Surely ASIC knew when the banks exited this funding would dry up, they cant keep squeezing those are left for too much longer, and really we should get value for these levies . They are not just ASICS money to spend on what they wish, its not supposed to be a magic pudding for these people, but they treat it as such.
Two words "Bloated Beaurocracy"
Questions need to be asked about the level of wages/income we are funding at ASIC. Since they separated themselves from the Public Service Act they have been paying themselves whatever they want. They voted and approved pay increases and bonuses in the middle of a pandemic, whilst people were hit hard with the repercussions of lockdowns etc.
ASIC is corrupt, simple.
Oh, and Bent darling, yes I am real. Some of us prefer privacy but are willing to put our name to things rather than an immature pseudonym, baby cheeks.
Wow, just got my renewal. $5,122 for just myself with $1,500 base fee, $2,426 for an adviser (myself), $1,196 because i still do life insurance. Oh yes, late payment penalty interest will be charged at the rate of 20% pa each month the levy remains unpaid WTF?? How is that legal?? 20% interest!!
Add on PI in the $25ks, AFCA Fee (waiting for this one), Asic registrations, software of $10,800, audit fees, licensing costs, etc. and it's super expensive to give advice.
Then there is exam (passed but what a headcase i was afterwards), studies (mostly ok for me but i pity others), huge amounts of compliance, the abolishment of "evil" commissions, the abolishment of ongoing fee arrangements (to annual ones), the restriction of what the super and pension funds can pay under "trustee responsibilities", the decimation of the life insurance industry and massive premium hikes with APRA's blessing.
WOW!!!!!!!! It really amazes me there are any advisers left. We just lay on the ground while they kick us some more.
"Here, have a little more!" "STOMP!! KICK!!"
"Thank you very much ASIC, APRA, PI Insurer, AFCA, Insurance Companies, FASEA. Please, just a little more of the stomping and kicking so i can relax in my coma."
Even a positive person with a lot of optimism is tested in our industry and this levy is just bull dung, it really is.
Ethical Paul, you forgot the bogus lookbacks the big boys are doing to destroy those who survived and moved on from the vertical models. Handing out practice of the year one day and then telling you the pre-FoFA reviews you did 10 years ago don't count as reviews and you're supposed to cough up the bucks. The hilarious bit is they're doing this to AR's of other licensees without asking the licensees first. At some point this must get out to the media or the authorities you'd think.
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