Budget signal on FASEA's future
The future funding of the Financial Adviser Standards and Ethics Authority (FASEA) will be a matter for next year’s Budget, but the Government has signalled that the authority will not be gaining any significant further resources in the meantime.
The Budget papers reveal that FASEA is expected to carry a staff of 10 over the 2020/21 financial year, which appears to be slightly down on the number of positions outlined in the authority’s 2019 annual report.
At the same time, the Budget papers point to funding for the authority being slightly up to $4.2 million across the Budget period.
Because of the size of FASEA, and unlike major agencies such as the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), the Budget documents have not provided estimates beyond the current financial year.
The funding and staffing position signalled in the Budget will reinforce speculation that FASEA might ultimately be folded into the new single disciplinary body structure which was one of the key recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry.
Importantly, key industry stakeholders including the Financial Planning Association (FPA) have signalled their support for making FASEA part of a larger entity handling regulation in the sector.
In its 2019 annual report, FASA said it received industry funding of $3.9 million annually under a contract which expires on 30 June 2021 and noted that funding was intentionally short-term to cover the establishment of FASEA and its initial period of operation to enable it to fulfil its legislative timelines.
“It is contemplated by the funding agreement that prior to the termination of the Funding Agreement, separate arrangements will be put in place for the financial services industry as a whole to provide ongoing funding to FASEA to enable it to perform its functions under the Corporations Act beyond the expiry of this Agreement,” the 2019 annual report said.
Subsequent to that report, the Government announced its intention to pursue the establishment of the single disciplinary body.
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