The Federal Government has provided financial planning firms and other companies working in the financial services industry with the draft legislation underpinning the fee for service funding model for the Australian Securities and Investments Commission (ASIC) and confirming a substantial lift in costs.
The draft legislation would see the hourly rate charged by ASIC increased from $70 an hour to $175.95 an hour.
At the core of the Government’s legislation were substantially higher caps on the fees that can be charged by ASIC, rising from $10,000 to $200,000 in some cases and from $50,000 to $300,000 in others.
The explanatory memorandum accompanying the legislation said the $10,000 cap was being increased to $200,000 to allow ASIC to better align its fees “to ensure cost recovery of the costs ASIC incurs when providing regulatory services”.
It went on to say that allow ASIC the ability to determine the criteria and complexity of matters would allow the regulator to be able to better recover the costs of its regulatory activities.
“This will ensure entities will pay the appropriate fee based on the complexity of the transaction for the service ASIC provides,” the explanatory memorandum said.
Elsewhere, the explanatory material referred to the formula that ASIC uses to charge fees in relation to granting market licences and dealing with potential conflict, adding that “the fee is the hourly rate times the number of minutes taken divided by 60”
“The hourly rate will increase from $70 to $175.95, to closely reflect the costs ASIC incurs,” it said.
Releasing the draft legislation for consultation, the Minister for Revenue and Financial Services, Kelly O’Dwyer said an industry funding model was a critical component of the Government's reforms to strengthen ASIC and better protect Australian consumers.
“Industry funding ensures that the costs of regulation are borne by those that have created the need for it, rather than the Australian public.,” she said. “These proposed amendments allow ASIC to better align its fees, by enabling ASIC to charge a cost reflective fee for the services it provides for a specific entity.”
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That is fine, as long as all those assessing and advising have a number of years actual financial planning experience, have CPD system for the hours they study, a degree and say 2 years running their own business es.
I would like to be able to re-coup from ASIC the costs of implementing all the FOFA changes. Nearly forty years in the industry, not one complaint ever. Still paying for the sins of of a minority.
So they are rewarded the more inefficient they are! I don't think the public service needs to be encouraged to be more inefficient....if that's possible.
You cannot apply commercial realities to these people, they have ABSOLUTELY no idea.
Just look at what they reckon a risk SoA costs.
No wonder they want to review 30% of financial advisers. Im also sure there are performance and revenue targets at ASIC.
What a perfect time to decide that they will charge more than double what they currently do, just before they pass yet another cost on to the ever more down trodden adviser who has had their revenue cut significantly, their staffing costs increased (due to pointless extra compliance) and their time to be at work reduced due to having to go back to uni.
It will be nearly impossible to do what i did and start an advice business from scratch with all these extra costs. Im telling my kids to go work for a government department. You dont need to know anything, you can make up rules to suit the companies who will offer you career progression and you can never get fired. Plus 15% superannuation contributions
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