“Not a day goes by without the Australian Securities and Investments Commission (ASIC) and other regulators making some half-baked announcement, designed to drive a wedge between consumers and service providers” and seeking to abolish stamping fees is one such example.
That is the analysis of the founder and managing director of the Investment Collective, David French, who has used a submission to Treasury on the Stamping Fees Exemption to argue that current arrangements should be maintained and simply reflect the consider work put in by financial services licensees.
“Let’s be clear from the start – stamping fees are a fee,” his submission said. “They are paid by product issuers, and they compensate for significant effort on the part of the AFSL holder. Assuming a desirable investment opportunity, these fees are earned in a very competitive environment, where a number of AFSL holders are vying for a limited amount of stock on offer.
The submission said that while the new Financial Adviser Standards and Ethics Authority (FASEA) code of ethics precluded advisers from receiving stamping fees, the same did not apply to licensees.
“There is however no rule preventing a Financial Services Licensee from receiving stamping fees, and neither should there be. Stamping fees are intended to offset the administrative burden of taking on a new issue,” it said.
French released his submission to Money Management in the context of the Financial Planning Association’s (FPA’s) submission having backed the banning of stamping fees.
Comments
I don't buy the argument it's ok for licensees and not advisers to receive this. Ultimately Licensee's are responsible for their reps. So a Licensee secures a bunch of say a hybrid float, it needs those reps to distribute it - that is simply not in the spirit of advice - the Licensee offers bonus type structures related to corporate actions - it is what it is, and needs to be scrapped to help dismantle yet another advice arbitrage.
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