Financial adviser exam will cost millions
The financial adviser exam represents the biggest on-going expenditure for the Financial Adviser Standards and Ethics Authority (FASEA) according to the authority’s business plan covering 2018/19.
The business plan, provided to the Treasury, places the cost of running the exam above the cost of paying the wages and salaries of FASEA executive and support staff.
The annual budget contained in the FASEA business plan reveals the cost of the exam to be $1.976 million in the current financial year and $1.952 million in the two subsequent financial years giving it a total cost over the period of $5.88 million.
This compares to FASEA executive and support staff wages and salaries bill amount to $4.433 million and the board costs amounting to $2.304 million.
Just as importantly, the business plan envisages the authority being in deficit over the three year period.
The business plan, hosted by the Federal Treasury, notes that total funding of $3.9 million a year is being provided by FASEA from eight contributors made of ANZ, Bendigo Financial Planning, Commonwealth Bank, Macquarie Equities Limited, National Australia Bank, Suncorp Metway, Westpac and AMP Limited.
It said the funding agreement was based on a formula to calculate amounts due per quarter from each funder based on relative adviser numbers.
While not referenced in the document, the ANZ advice businesses are in the process of being acquired by IOOF, albeit that ANZ said it was reviewing the situation following the initiation of legal action against the company and its top executives by the Australian Prudential Regulation Authority (APRA).
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