ASIC says the levy is mechanical, Hume says ASIC has discretion

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”.

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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.




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If I am the only Director with 2 AFSLs who complains against the 2019-20 Industry Levy, ASIC could not care less, I am only 1 Queensland peanut. If 1,000 AFSLs small independent, non-institutional aligned complain and then send copies to the Office of the Senate for 'Joint Parliamentary Committee for Corporations and Financial Services', the Political ground needs to move under ASIC's corporate lawyer's feet. If the ground moves, all of the ASIC Commissioners should be asked to resign (and follow James Shipton out the door) for unconscionable conduct caused by unreasonable and disproportionate affect on small business, advisory AFSLs. I read yesterday that institutions paid a limited fixed fee, but with advisers, the ASIC Industry Levy has gone up 300% in 3 years since it first became operable for 2017-18 (this adds discrimination to ASIC's unconscionable conduct). However, it is called a Levy, but it is not a functional levy. Levies are imposed to bring about good in an industry (eg, in the Agricultural Sector) and acts in the public interest. ASIC's Industry Levy (misnamed) does not bring about any good in our industry (we advisors carry the every day responsibilities) and it does not act in the public interest (failing FASEA Standard 12). If it is not producing a functional 'public good' benefit when from 2002 ASIC was suppose to perform as a functional regulator, the only conclusion remaining is that its disproportionate unreasonable affect is abusive. AFSL's financial advisers are therefore subjected to abusive extortion and Senator Jane Hume (graduate of Melbourne University Law School) is not performing (she knows "Hume said ASIC has discretion") which is a disgrace by not exercising her Ministerial authority and failing cognitive Domestic Governance. FPA like back in 2008/09 over servicing commissions, has wimped out again. So please with another 900 AFSL advisory businesses in Australia, go online to ASIC and lodge complaints. ASIC will say they will respond in 28 days. You will get a wishy-washy response from its smart corporate lawyers. On 23rd April (day due to be paid), lodge requests for an Extension of Time to ASIC for delay payment until an Appeal to the Commonwealth Ombudsman is processed. Then if the Commonwealth Ombudsman says its Law, (unconscionable abusive conduct is not Law), then Appeal again to the Administrative Appeals Tribunal. You only gain respect by forcing the authorities to review this abuse. After abuse by a life insurance company in 2016, I intervened in a Federal Court Case (September 2016) by submitting several Affidavits, where the Senior Counsels from 2 institutions and Judge Foster grilled my Barrister and we lost on our arguments of anti-competition discrimination, which refused to accept new business, but we saved our existing business in a multinational takeover. You need to have faith to defend Common Law against ASIC's corporate lawyers causing unconscionable conduct and likely discrimination against small business advisory practices. In my complaint, I have explained to ASIC that due to its 2019-20 Industry Levy invoices, advisers are likely going to increase their ongoing Financial Services Fees from 1 July next, clients will be given copies of ASIC invoice to substantiate the increase, failing Industry public good, it's sick. What was the likely cost of an Australian Federal Court case, in 2016 it was about the same as ASIC Industry Levy today. If in a future Federal Court Case, ASIC would have submit to discovery and provide all evidence to disclose facts of the case. My 2 industry levies are now $39,000. What's it going to be next year, $60,000? How can a small business budget its cash flow forecasting in its management accounting around trebling every 3 years? .. wake up and take Direct Action.

They say the levy has increased 29%? Try almost 300%! In a year of pandemic the govt should have returned to taxpayer funded regulation. Industry funding is an absolute joke when the smaller companies are hit hard to make up for the big banks exit from the industry. We shouldn't be burdened so severely to pay this levy.
The increasing cost of compliance with ASIC in the last 5 years has cost jobs, and I'm sure we aren't the only small company that has had to cut back expansion plans and new jobs because of it.

We are the vanguard of the same problem. "The Bureaucracy is expanding to meet the needs of the ever expanding bureaucracy"...you can see it everywhere. The State / Swamp creatures know best and they will make you suffer until you agree that your suffering is for your own good. This Lib / Labour thing is nonsense - it's all just Big Government / Big Brother (should be Sister these days). Wake up. Swamp rats talk to other Swamp rats (bureaucrats) and not the people they are meant to represent as 'public servants'. Things will not improve as long as Big Gov aspires to bring us to utopia. Things will improve when government is afraid of the people again rather than the current state of being, where the people live in perpetual fear of big 'R' regulators and the Nanny (nice way to say police) State.

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