The Australian Securities and Investments Commission (ASIC) has been warned that accountants operating under limited advice licenses have been struggling with the financial and emotional cost of dealing with the additional red tape associated with removal of the so-called “accountants exemption”.
As well, the regulator was warned that “an exodus of accountants from the financial advice industry at a time when the Government (through FASEA) is trying to increase the level of qualifications and professionalism would not be in the public interest”.
Accountancy body, Chartered Accountants Australia and New Zealand (CAANZ) made a plea on behalf of its limited advice license members as part of a submission to ASIC responding to the regulator’s Cost Recovery Implementation Statement, the details of which were revealed this week.
The CAANZ submission stated: “Australian financial services providers have been struggling with the cost, both financial and emotional, in dealing with additional red tape as a result of the removal of the accountant’s exemption”.
“These costs encompass additional continual professional development as well as Cost Recovery Implementation Statement (CRIS) levies. Many of our members that are Australian financial services providers have to comply and pay other CRIS levies as well. The cumulative effect of levies, especially on small businesses which need the multiple registration is significant,” the submission said.
“Members who have limited licences are finding these costs particularly onerous and may are looking to exit this industry at a time when the government is trying to increase the level of qualification and professional in the industry,” it said.
The CAANZ submission urged ASIC to take into consideration when determining the CRIS levy how it would affect the business models of limited licensees and suggested a reduction in these fees could be achieved by waiving the fixed levy, reducing the per adviser levy or charging a fee aligned with revenue.
ASIC released its estimated Cost Recovery Implementation Statement for 2018-19 yesterday confirming that licensees providing personal advice to retail clients on relevant financial products will be paying amongst the highest levies estimated at a total of $25.031 million.