The Australian Securities and Investments Commission (ASIC) insists the industry funding model which drives the adviser levy is mechanical and it has little control over the outcome, but the Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume says the regulator does have discretion.
In evidence before a Parliamentary Committee which left some advisers confused, ASIC deputy chair, Karen Chester downplayed the ability of the regulator to alleviate the burden being imposed on advisers, even though the regulatory work which drove the levy increases was generated by the big institutions.
“It is very difficult to carve one piece out against another,” she said describing the process as “mechanical” and noting that there was “very little that we can do”.
However, Hume noted to a hearing of the Senate Economics committee that the levies imposed on the 10 largest licensees had remained steady while stating that the funding model had “flexibility” and that ASIC had discretion.
The Senate Committee also heard that there was no guarantee that the devolution of Financial Adviser Standards and Ethics Authority (FASEA) functions between Treasury and ASIC might yet add to the levy burden.
ASIC chair, James Shipton said that the way the industry funding model worked meant that if costs increased that cost was allocated across sectors.
“There will be a cost increase but I can’t speculate on how much,” he said.
Shipton said ASIC was working with Treasury on required costs and looking to put a proposal to Treasury.
He said that it would be a matter for the Government on whether the costs flowed through to the industry funding model.
Earlier, ASIC commissioner, Danielle Press was asked how much the ASIC levy had increased over the last two years and claimed that the increased cost per adviser had been about 29% over the last 12 months.