The financial regulator has revealed that total regulatory costs yet to be recovered from the financial advice sector stood at $2.4 million as at 30 June 2021, substantially higher than funds owed a year earlier when the sum stayed well below $300,000.
The total regulatory costs for the sector in the FY2019–20 were however substantially higher than in previous years and reached $59.59 million, as opposed to $34.07 million in FY2018–19 and $28.26 million a year earlier.
According to the data that the Australian Securities and Investments Commission (ASIC) provided in reply to a question on notice to the standing committee on economics, the median levy for licensees that provide personal advice to retail clients on relevant financial products was $3,926 in FY2019–20, $2,642 in 2018–19 and $2,434 in 2017–18.
The most recent fee consisted out of the minimum levy of $1,500 plus $2,426 per adviser.
Last week, Treasurer Josh Frydenberg announced “temporary and targeted relief” for financial advisers in the form of a cost cut of the recovery levies charged by ASIC.
“The sub-sector as a whole will pay an estimated $46 million less in ASIC levies in 2020–21 alone, with further savings flowing in 2021–22,” the Treasurer said.
Under the announced cut, ASIC levies charged per licensee will remain at $1,500 — a substantial reduction relative to the level estimated in ASIC’s 2020–21 Cost Recovery Implementation Statement of $3,138 per adviser.
Moreover, ASIC levies charged for personal advice to retail clients will be restored to their 2018–19 level of $1,142 per adviser for the next two years (relating to 2020–21 and 2021–22).
While the temporary relief is in place, the Treasury is expected to kick off a review of the ASIC industry funding model in 2022 to ensure “it remains fit for purpose”.
I am surprised at ASIC’s statement that their ‘median levy’ is $3,926 per licensee. That is the levy for a single adviser licensee and can only be the median if 50% or more of licensees are single-person licensees. Since that is not true – single person licensees are much less than half of all licensees, this number cannot be right.
It is also disingenuous to use the median here. They should use the average and then it would be more like $20,000 or $30,000 for 2019/20.
Is this a breach by ASIC? Do they have the defence of ‘inadvertent mistake’, i.e. “we can’t calculate the median and we don’t know the median is inappropriate here”?
ASIC are totally corrupt in almost every way they act.
If the rules ASIC apply to Advisers were equally applied to ASIC, they would have had to ban themselves countless times.
ASIC = A Sick Institution CORRUPTED !!!!
On the issue of ‘conflict of interest’ alone!