FPA accuses ASIC of fee gouging
The Financial Planning Association (FPA) has accused the Australian Securities and Investments Commission (ASIC) of seeking to "gouge" financial planners via new industry cost recovery mechanisms which would increase the industry funding levy by 38%.
ASIC released the consultation paper around its Cost Recovery Implementation statement on Friday, and while claiming the costs were only a guide immediately elicited an angry response from the FPA.
The ASIC document placed cost recovery levies to be raised with respect to financial advice at $29.850 million, alongside statutory levies for the sector of $7.549 million giving a total levy of $37.399 million.
The FPA immediately urged the regulator to reconsider the levy increase pointing out that it represented $1.571 per adviser on the basis of ASIC looking to recoup $40.17 million from 3,051 AFS licensees with 22,652 advisers.
“While ASIC states that the indicative levies for 2019–20 are an estimate, the FPA believes a 38% cost increase per adviser is excessive and last financial year the final levy amount was even higher than the estimate,” the FPA said.
FPA chief executive, Dante De Gori, said the proposed increased amounted “fee gouging” and represented an unreasonable demand of financial planners given the current economic environment.
“Financial planners were hit with a 22% increase in 2017-18. Now ASIC estimates the levy will increase by 38% for 2019-20. No matter which way you look at this, it is excessive at a time when financial planning professionals are working hard to help their clients through extraordinary circumstances,” he said.
“Financial planners themselves are already under tremendous pressure to meet new education requirements, await critical outcomes on the FASEA extension from an unpredictable parliament and overhaul their business models to meet regulatory requirements.”
Recommended for you
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
