Appearing at the Senate economics committee last week, ASIC executive director of financial services and wealth Joanna Bird said it was possible the regulator would need to devote additional resources to advice supervision as a result of the Better Advice bill, which was lacking detail around the types of matters that would be referred to the adviser disciplinary panel.
“It’s hard for us to estimate the exact level [of resources] going back to the fact we don’t know how many and what sort of matters we will refer to the panel,” Ms Bird said.
“That is going to be a huge determinant in how much this process will cost. The bill places a large number of obligations on ASIC – we will meet those obligations using existing funding [but] that will mean we may need to look at some of our existing business usual work and re-prioritise to ensure we meet our obligations under this bill.”
The comments come following years of dramatic rises in the supervisory levy for the advice industry since ASIC’s industry funding model was introduced, with costs per adviser having risen around 30 per cent year on year to $2,400 in the most recent financial year.
Given the considerable existing costs to the advice sector under the funding model – where around 17 per cent of the regulator’s total costs for the 2020 financial year were allocated to advice licensees – independent senator Rex Patrick questioned whether ASIC may be given additional funding from government to tackle the new requirements in the bill.
“That’s a question you should direct to Treasury as to whether ASIC will receive funding in MYEFO for this bill,” Ms Bird said.
“Under the current industry funding model costs are allocated by the industry to which regulatory activity relates to – to the extent this bill means ASIC may spend more resources on the advice population, the population will pay more under the industry model.”
Keep increasing it ASIC…
I’ll keep increasing my fees…
More Aussies who need me wont be able to afford me…
But I won’t miss out, and neither will my wealthy clients.
Maybe Bill Shorten was right about the Liberal Party only looking after “millionaires” afterall…
But then they could ask you to show how you’re providing value for money to your clients under FASEA Standard 7.
Can’t win.
Wrong, value for money can state that 35% or even up to at least 50% of our work is now pure ASIC, Frydenberg & LNP mandatory compliance costs.
Agreed no value but a cost that must be charged under this moronic LNP Govt. Value is this to be lawful giving Advice.
Asics levy is the biggest fee for no service scam going around.
The issue at the heart of it is the chronic underfunding of ASIC by the Federal Government. Look at ASIC’s own financials – they have been operating in deficit for years. Sure enough, no-one from ASIC raised this at the Royal Commission because the response would have been even more budget cuts. However, independent third parties such as the FPA should have raised this issue during the Royal Commission, because it is ultimately government’s obligation to ensure regulators have the resources to do their jobs properly. The money can surely be found from somewhere where there is government waste – start with Hayne’s very generous Judge’s pension.
How much money is enough for ASIC?
That’s for ASIC to figure out. Surely all those lawyers and ‘learned friends’ in their ranks can figure out how much money they need to spend on court costs. More importantly, they should have the spine to tell Josh Frydenburg how much they need, instead of leaning on our industry to cover the difference.
Are you suggesting something like a FDS? Good idea. ASIC could outline their planned activities for the coming 12 months and the associated costs. Court cases can be tendered out to the legal profession – that way the costs are known and competitive – no more blow outs.
Easy.
This actually makes sense.
Every business / government department should have a budget.
Better still, put the role of ASIC out to public tender each year.
About $1 million more than they can get
This is crazy, those few of us who are left (28,000 advisers down to 18,000 advisers and diving, -30% crunch) are paying for the misconduct of others!!! When we only have 10,000 left, we will be paying $20,000 per adviser, if not more if ASIC ramp up operations against the rest of us! The Gov’t and ASIC have broken the industry by killing the many, for the faults of the few!!!
I think it’s about time we had a royal commission into the hayne royal commission plus all the other non-sense going on…..
ASIC or A Sick joke?
Sick jokes they are…!
What else was anyone expecting?
ASIC’s evil and conflicted obsession to oust any and all personal advice-giving advisers out of this industry could have only ever have led to this disgusting and unfair outcome.
Them not even knowing how to budget for this each year only makes it worse but if there’s only 10,000 advisers left to fund whatever that magical figure is they invent for next year, when there was once over 30,000 advisers to cover it, what other possible outcome could there be?
We done though ASIC. If the ridiculous FASEA Code of Ethics, unfair exam (because it covers content not relevant to those who sit it) and further education requirements aren’t enough on top of the over reaching legislation and compliance obligations this Government seems to dream up every day, your funding levy should be more than enough to achieve your goal of there being NO ADVISERS left to rule over.
I joined this industry over a decade ago to help as many people as I could get properly covered so they and their families didn’t have to rely on Government support and charity; so they could live with dignity. You’ve not only stolen that from me as an adviser now but hundreds of people I already look after and those I would have helped in the future.
You keep focusing on the 3% though while you force 97% of us out. What clever stuff that is; just brilliant really. (Slow, slow clap)
You have created the most toxic, stressful and unfair industry to work in anywhere in Australia but you can shove it now. I’m out as soon as soon as I can get all my ducks in a row. What a disgracefully led and grubby organisation ASIC is. Just filth.
Yes well summarised but you need to make an appointment with your local Federal member and tell him or her in no uncertain manner what has happened and how it has destroyed your small business operation and career. They may not be able to do much about it singlehandedly but at least you told your story and the plight that you and many others are in.
Hey Bigal….thanks. I’m in regular communicado with my local MP, who’s actually a really nice guy (Tim Wilson) and have just sent him an email with my disgust for ASIC and how this government is treated financial advisers the last 5 to 6 years. It’s just outrageous that this can even be considered fair and reasonable.
Unfortunately Tim’s obsessed with trying to detail the Industry Super rorts ( a worthy cause but a losing battle ) and has missed the big picture of his own LNP & Frydenberg killing Real Advisers and allowing ASIC to kill Advisers too. I have written to Tim several times on this but no response.
“I joined this industry over a decade ago to help as many people as I could get properly covered so they and their families didn’t have to rely on Government support and charity; so they could live with dignity. You’ve not only stolen that from me as an adviser now but hundreds of people I already look after and those I would have helped in the future.”
I don’t rate ASIC, but seriously. Be honest. You joined this industry because you thought there was good money to be made. There still is, you just have to work a little bit harder for it.
and yet just yesterday, we heard ASIC would not be issuing sanctions and fines on AMP. So the honest advisers and there clients are left to foot the bill. Paying for their mistakes…… TiK Tok here I come? This is blatant attack on face to face personalized advice.
bet you don’t leave
For SALE
One compliant business – Adviser will ride his horse off into the sunset.
I have said for the last 6 months that it is going to $4,800 per adviser for 2020/21 (last year)
One more bullet in an already dead animal.
It is rubbish to say costs per adviser are $2,400. With so many people now operating with their own licence, and only one or two planners. It is $2,426 per adviser plus a minimum $1,500 for the AFSL which provides financial advice, plus $1,500 for the AFSL to provide insurance advice.
So the Liberal’s great big new tax cost my sole adviser business $5,122. And of course it will increase; the Liberals have told the bureaucrats at ASIC to charge whatever they like; the mug planners will pick up the bill.
Anyone complaining about it should simply stop their FPA membership, because they have failed to represent the industry.
Yes the Life insurance ASIC levy for AFSL’s has already increased by a factor of 5 in just 3 years.
At the same time the LNP / Frydenberg has used Communist style market intervention to cut adviser commissions by 40% to 50% less.
More costs, more REGS, more Red Tape and less Adviser reward.
What an absolute travesty is this LNP Government to Real Advisers.
$5,000 per Adviser next ASIC levy for sure.
Over 5 x increase in this ASIC Levy in just 4 years.
Frydenberg’s Double Adviser Taxation. We pay good taxes like every other worker and then we get to pay massive double taxes via these obscene ASIC / Govt levies.
[b]Frydenberg has to go !!!!!!!!!!!!!!!!!!!!!!
LNP, Frydenberg and ASIC need to get off Advisers backs and out of our pockets. [/b]
Clients ultimately pay.
Great job LNP, Frydenberg and ASIC you are disgusting.
winge winge winge
Yes and now action, action, action.
Real Advisers have had a gut full of this LNP / Frydenberg rabble.
We are taking action to get rid of you !!!!!!!!!!!!!!!!!!!!!!!!!!!
Maybe, just maybe the LNP and Frydenberg will start to listen when in opposition.
ASIC have deliberately orchestrated the ridiculous mess of red-tape and compliance requirements, including paying cash for comment to manipulate the FASEA code of ethics into it’s current unworkable form. They then demand licensees report every single breach, even if not significant or material. Now they plan to allocate more resources to oversee it and charge us for this utter nonsense. ASIC is completely out of control and must be stopped.
The joy of an unlimited checkbook.
ASIC has a history of paying a dividend of around $600 million per annum back to consolidated revenue. Rather than needing more funding it has always been a source of hidden taxation.
You are kidding.
And given that FPA will no longer be responsible for disciplinary action, and is not responsible for Code of Conduct, why aren’t we seeing commensurate reductions in annual fees there? FPA should stump up.
As Gomer Pyle used to say…….”Surprise, Surprise, Surprise”……….NOT.
It appears that the future growth opportunities within the financial planning profession will now be as follows:-
1/. Compliance Specialist
2/. get a job with ASIC as an Enforcement Officer (i.e. government job, guaranteed weekly salary, 15% super)
That will probably push the financial advisers that remain in the industry to bankruptcy… Well done ASIC and all involved!
What we cant accept is that the Levy last year increased in 6 months by over 60% with the excuse of covering costs of litigation against the Big Banks – the IFA’s funded that litigation but the penalties and fines collected went to the Government not to offset the costs of the litigation. Are we now to fund further fines and penalties going to the Govt from the Disciplinary Body. They will soon have there way with advisers forced out and advice once again in the hands of Institutions who will need to step in and “save” the industry as the only ones who can afford to pay.
when is the government going to respect small business owners and fess up to their mistakes? I have not had 1 complaint since operating commenced in 2005 so WHY should I accept the cost of someone else’s undoing? Can I reject this? FFS!
All those cost levied against Advisers, yet they only make up 1.5% of AFCA complaints, most of which are probably BS “coached” complaints anyway. Under FASEA this would not represent value for money to the consumer (Advisers). Fail.
As each month rolls on, the potential for a change of Fed Govt increases due to their increasing ineptitude.
Ok….so a lack of detailed info from Parliament means we as advisers need to shell out more $$’s???? Disgraceful. Why don’t the Senators pin these ASIC buffoons to the wall and get definitive answers?
Another nail in the industry coffin!
When will we get their estimate of the 2021 levy. I believe a draft CRIS is overdub
Maybe ASIC could engage with MyBudget. They are helping them set up a licence after being found providing unlicenced advice, so the least MyBudget could do is show these imbeciles how to create a budget. Either way you can count on the declining number of advisers being left to cover the rapidly increasing levy, while all penalties from ASIC’s action will be forwarded to consolidated revenue. What a scam.
ASIC costs and the sheer waste money associated with the over regulation of the advice sector have become unsustainable. This needs to stop now!
The lunatic mindset of the politicians and regulators has resulted in advice now being totally beyond the reach the majority. The costs associated with regulation far out weigh any harm ever done to recipients of advice.
We’re now in business to merely feed ASIC.
Just criminal.
Who’d thought a group that can have any expense they want and bill it to others would just allow things to get out of hand..
And honest advisers are being penalised for those that have been less than honest
This has now become a Joke!
Why doesn’t the government do this to every other industry and we can all go bankrupt together?