AIOFP to increase lobbying efforts over ASIC levy

Last week, the Australian Securities and Investments Commission (ASIC) published its draft Cost Recovery Implementation Statement (CRIS), in which the corporate regulator said the cost of regulating licensees that provide personal advice to retail clients was $55.5 million in 2022–23, down from $56.7 million budgeted last year.

The cost will be divided among a total of 2,655 AFS licensees, encompassing 16,019 advisers. As such, advisers will pay a minimum levy of $1,500 plus $3,217 per adviser.

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However, under the former government’s ASIC levy freeze, the costs actually charged to the sector amounted to $22.8 million. This meant that at the time, advisers were charged a minimum levy of $1,500, plus $1,142 per adviser.

In a letter to members, Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston said the outrage of members over the increase has prompted the association to raise its issues with Financial Services Minister Stephen Jones.

“We have decided to commence some lobbying on this levy issue due to the pain and anger this is causing many members, we have not seen this much frustration since the grandfathering revenue ban was announced,” Mr Johnston said.

“You may recall we suggested commencing this strategy leading into the final 12 months of this term of government and not put another issue on the minister’s plate, but we will do both considering the circumstances.”

Among the issues the AIOFP said it has raised with Mr Jones was that AFCA complaints are overwhelmingly aimed at institutions rather than advisers, the bulk of the royal commission complaints were also aimed at bank executives, adviser numbers have fallen precipitously so the levy is spread among fewer people, and “ASIC’s model of charging advisers for action against the insto’s and giving the ‘spoils’ back to consolidated revenue is grossly unfair”.

“We have received a reply today from ASIC pointing out that advisers can apply for payment terms based on hardship … on the ASIC website,” Mr Johnston said.

“This is yet another reminder that the advice community needs to raise some serious capital to ‘fight fire with fire’ at the next election, more on that shortly.”

Following the release of the government’s response to the Quality of Advice Review (QAR) in June, Mr Johnston called for advisers to band together to lobby the government.

“It is time we learn from it and finally do something about it,” Mr Johnston said.

“The harsh reality of the Australian political landscape is that allowing any person or entity to make political donations of any description to any political party is a profound conflict and should be banned with criminal charge implications, but nothing has been done about it since Federation in 1901.

“The only section of society funding all political parties should be the taxpayer, that ensures all political parties will act in the best interests of taxpayers not those who fund them — it’s not rocket science. You may recall Paul Keating said ‘just follow the money trail…’”

The answer to what to do about this, according to Mr Johnston, is to improve the place of advisers in this system.

“Easy solution, if all advisers band together and pay $10 per week, we will have $15,600,000 in two years ready to spend at the next election,” he said.

“That will certainly get us up the pecking order!”