Addressing the Stockbrokers and Financial Advisers Association 2021 Conference, ASIC commissioner Danielle Press acknowledged industry frustrations around the 60 per cent discrepancy between the regulator’s estimates of costs due for the 2020 year and the final invoices issued to licensees early in 2021.
“I will take some heat for our estimate being so badly wrong last year, and we are looking to improve that,” Ms Press said.
“It’s very difficult to know what enforcement costs are going to be in the coming 12 months because ultimately it’s a backward-looking levy – it’s difficult to sit here and say we know we’re going to be taking seven cases to court and this is how much it will cost us. Nobody could estimate that.”
Ms Press said variable costs as a result of cases that came across ASIC’s desk at the last minute were extremely difficult to estimate ahead of time, and that this would continue to be an issue under the current funding model.
“I can closely budget on what we’re going to spend on supervisory work and things like the access to advice [consultation], we’ve got a good handle on that,” she said.
“It’s difficult to get a handle on enforcement costs because we don’t know what is going to come out of the woodwork from here to next month, let alone 11 months out. We’re talking to government about this, but at the end of the day we’re implementing an instrument that is out of our control.”
Ms Press added that contrary to previous comments made by the government, ASIC did not have discretion around the costs charged to industry each year.
“We don’t have discretion, the levy is a recovery of the costs we spend. What we have discretion over is how much we spend in a 12 month period, and at the end of the day once it’s spent it’s recovered,” she said.
“The model is set by government – the government has said in the regulation that enforcement costs are recoverable by industry. We can have a debate about whether that’s wrong but it’s not worth having with me, it comes down to the instrument.”
She also acknowledged criticisms from some corners of the sector that advisers were being unfairly punished for the misdeeds of the major banks, which had since left the industry.
“Unfortunately we’ve got a numerator and denominator issue – both have hit the industry at the same time when there’s been a substantial change in the make-up of the industry with respect to what bodies are playing,” Ms Press said.
As you force more and more people out of the Industry, our fees will have to rise to cover the cost of your incompetence and high wages
I have been involved in the industry for 50 years, never had a client complaint and yet I get treated like a criminal. Who the hell thought that I am now going to have to go to University to become an honest adviser. Who would ever have thought that I would have to pay the fox for looking after the chickens coup. Why don’t you try putting a levy on Real Estate Agents? The industry is sliding down a dark hole. Every person is being penalised, the innocent and the guilty. Mr. ASIC why don’t you just clean up the bad guys, or are you that hopeless that you can’t catch them. Do you want a list? I’ve had a gutful.
Hey client I estimated your fees would be X but I have decided to charge you 2 times X you cool with that.
Oh and if your not too bad we will charge you any way. Its not my fault because it is above my pay grade.
And by the way I might get my fees 60% wrong next you cool with that?
Bit like the insurers, the leaches have killed the host.
Wake up fellow advisers. We are paying for all the unlicensed, illegal and ponzi schemes that ASIC also prosecutes. Our pockets will never be deep enough under this cost recovery model.
This is really sad. Cannot believe the number of advisers of good quality leaving the industry and not just older one’s either. Even the life industry shot themselves in the foot by lobbying for much lower commissions when at the same time compliance and levies plus PI costs make advice more expensive.
Stop forcing people to leave financial planning — would probably make it easier to calculate the fee.
Danielle Press – the “Gift” I think I will now call her – she just keep giving.
“It’s very difficult to know what enforcement costs are going to be in the coming 12 months because ultimately it’s a backward-looking levy – it’s difficult to sit here and say we know we’re going to be taking seven cases to court and this is how much it will cost us. Nobody could estimate that.”
Well, we are being told to do Fee Disclosure Statements looking back twelve month and forward twelve months – predicting the advise and services to be provided and the exact cost.
Here is a suggestion – ASIC could do the same.
As for the lawyers running up ASIC costs – get the lawyers to bid for the work – ie scope and exact cost. That way, lawyers will know where they stand and won’t just run up the bill and drag out the case on hourly rates. Easy stuff really.
But Danielle Press – she still can’t do it. Amazing.
Come on ASIC don’t have to justify anything to anyone, complete rogue regulators.
Do as I say says ASIC, predict frees 12 mths forward.
Don’t do as I do say ASIC as they can’t possible predict their fees they smack advisers with.
This is not about getting advice wrong. This is about getting budgeting completely wrong as there is no limit to how much you can spend.
I’m just ropable abut this. No S#*t they got it wrong! How about showing some integrity for once ASIC and rebating the obscene fees you stole from advisers this year. This is just another leftwing, socialist run organisation getting away with murder.
How does it continue time and time again without it being called to account? The unbelievable hypocrisy and double standards in Australia these days is simply staggering.
obviously they have never run an independent advice business, and should seek experience
So if we do an SoA and its “Badly Wrong”, then it should be ok then?
No way Mr Adviser.
Do as i SAY
Not as i Do.
What about the SMSF Expense FALSE Fact Sheet.
So dam wrong. Yet again wouldn’t take responsibility or do a Real Fact Sheet.
Yet more waffle. The Mafioso (who control your licencing) can pretty much do what they like. You pay, or you’re dead
Ms Press is always blaming everyone else.
Blame Advisers = Always, Blame AFSL’s too and Blame Pollies.
ASIC never take real responsibility and never are held accountable.
Press says we don’t have any discretion. But then says we really do have discretion as we decide how much ASIC spend. But whatever it is don’t blame us.
[b]ASIC ALWAYS BLAME ANYONE ELSE !!!!!!!!!!!! [/b]
and don’t forget a lot of things are above her paygrade….
I just realised why the ASIC levy is out of control.
Every government department and almost all business divisions need to budget before they get money allocated.
Not ASIC.
ASIC can spend an unlimited amount and gets it refunded in full. It sues wrongdoers who are not advisers any more and has advisers paying for it. Free and unlimited litigation funding, what could possibly go wrong?
This situation is so crazy that it is just hilarious. Soon we will look back on this year’s levy in wonder how low it was.