FASEA funding drying up

Financial advisers should be bracing for another levy to fund the Financial Adviser Standards and Ethics Authority (FASEA) in next year’s Federal Budget because most of the major banks will no longer be there to do so.

Over the past three years the bulk of FASEA’s funding has come from seven of the banks plus AMP, but only AMP and National Australia Bank (NAB) still have significant current wealth management interests in the wake of ANZ, Westpac, Suncorp and Bendigo largely exiting the space and with the Commonwealth Bank in the process of doing so.

The FASEA funding arrangements put in place by the Treasury saw ANZ, Bendigo, the Commonwealth Bank, Macquarie Equities, NAB, Suncorp, Westpac and AMP providing total funding of $3.9 million a year but the arrangement will expire in May.

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However the Government has yet to flag how it intends to fund FASEA in the 2020-21 Budget year in circumstances where it has also yet to outline either the structure or the funding model for the single disciplinary body recommended in the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The future funding structure is also being viewed against the background of the decision by the Financial Planning Association (FPA), the Association of Financial Advisers (AFA), the SMSF Association and other members of a consortium not to proceed with establishing a FASEA code-monitoring authority.

While the members of the industry consortium would have funded establishment of the code-monitoring authority, its ongoing operational expenses were to be funded by membership fees from financial advisers.

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If the major banks caused all this mess, then just packed up and took the bat home with them, why the hell are the rest of us that have never had EUs, have not needed to pay any compensation, why the hell do we get sucked dry for these public servants to sit about dreaming up hurdles for everyone to jump over. This is a rort to the highest order! Us small players offer the best services, we have small client groups we work very closely with them, we arent out there to make millions of dollars. However we pay the same as advisers that have 800 clients that have 500K turnover, why?

Last nail in the coffin.

Wow, what a FU.
If they pulled the pin on the whole thing, just think, so much money, time, and lives wasted.

I can sense a conflict coming. FASEA will note that their funding is about to be impacted and they will then roll back their current stance to help prop up adviser numbers and secure their funding.

I think they will fail themselves under standard #3. they will be receiving a payment from a 3rd party (advisers) and also providing a service to the same 3rd party. They will have to stop and not provide any service and refer the matter to a truly independent organisation.

Thats a good point.

Spot on

What a diabolical mess this has been.

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