Costs to regulate subsectors across the advice sector are expected to decrease from 2020-21 to 2021-22, according to ASIC.
In its draft CRIS, the corporate regulator predicts that the cost of regulating licenses that provide personal advice to retail clients on relevant financial products will drop from $25.8 million to $24 million.
The estimated cost covers 2,759 AFS licensees and 17,402 financial advisers, while a minimum levy of $1,500 is expected, plus $1,142 per adviser.
Regulating licensees providing advice on products that are not relevant financial products are also expected to be slashed from $189,817 to $65,575.
For licensees that provide general advice only, ASIC predicts that the regulation cost will be $505,467, down from $602,613 in 2020-21.
However on the insurance front, costs are expected to increase for product providers.
ASIC estimates that the cost will jump from $24.6 million to $29.4 million.
Just over $4 million of that figure will go towards enforcement while over $3 million is expected to go towards supervision and surveillance.
The regulation of risk management product providers is set for a significant spike, with costs predicted to go from $118,762 in 2020-21 to $597,843.
Regulating insurance product distributors is expected to remain at $3 million.
Meanwhile the 2021-22 year will be the first time claims handling and settling services providers is treated as a separate subsector in which they will be charged a levy. The estimated cost of regulating the subsector is $804,069.
Final levies will be published by ASIC in December 2022 and invoiced between January and March 2023.
Feedback on the draft CRIS can be submitted until 28 June 2022.
Because the advice sector is smaller?
Talk about fee for no service! If the number of advisers has dropped by 30%, why not their fees?
Adviser numbers are down 30%, but ASIC costs are only dropping 7%
Clearly their system is broken.
How can anyone except government think that $4m in enforcement costs is a reasonable investment of taxpayer money when the majority of bans seem to be handed to Advisers who left out a piece of paper a client didn’t want and therefore had no detriment to the client or their outcome? Perhaps taxpayers should be the ones to judge what issue and/or case justifies government expenditure since its their money being spent.
ASIC are a big bloated bureaucracy focused on imposing red-tape and compliance so they can justify their existence and expansion.
Jane Hume introduced the concept of a government bureaucracy being able to grow as much as they like and just to impose the cost onto small business.
$100 says the numerator of total cost doesn’t decrease as quickly as the denominator of adviser numbers. This profession is done.
The cost on Advisers to run business these days is high enough. ASIC should be funded by the government not the advisers – esp those that have not had anything go against them. I don’t care if its less or more I don’t want to pay it.
It won’t get cheaper…I’ll be paying for them to police Tik Tok next.
With maybe 35% fewer advisors, there should be 35% reduction to the volume of work.
That being the case, ASIC should be able to shed 35% of their own staff handling this sector.
But, being the empire builders they are, I’ll bet that doesn’t happen. We’d be lucky if the taxpayer even sees a reduction to their wages bill. It would be a very impressive day when ASIC finds themselves actually accountable for the choas they have created.
There is no way that this pause in fee increases will last. Regulators will always find new areas of concern to ‘investigate’ and devise new rules to fill in their days. This industry is like a parasite-host relationship and will continue until either (i) there are not enough hosts for the parasite to attack, and/or (ii) they expand their reach to tap into finfluencers, real estate agents, crypto exchanges, etc.
So very true. And the concept of allowing a government bureaucracy to act like this is due to Frydenberg and Jane Hume. #socialists