Bert van Manen accused ASIC of not having appropriately proportioned the costs levied at the advice sector between small, medium and large firms, asking the regulatory body to provide a detailed breakdown of costs levied at “small, medium and large businesses”.
Mr van Manen said he thought ASIC needed to do more work in “charging the fees where they belong”.
Small to medium businesses were “paying proportionately more than the big end of town” he said, pointing out that the way fees are charged “makes no sense to me at all”.
ASIC chair Joe Longo stated that ASIC was “very alive” to the plight of small businesses in the wake of levies, which have risen by 236 per cent in recent years.
The regulator’s commissioner overseeing the advice sector, Danielle Press, later rejected suggestions in the hearing that ASIC did not care about the plight of small businesses.
Ms Press stated she “thinks about the impact on small business every day”.
“Do not think just because the numbers are going up, we don’t care, I care deeply about this,” she said.
However, Mr Longo stressed that the regulatory body was hamstrung by federal policy.
Federal policy has no definition for “small business enterprise”, he stated, making a distinction and any adjustment of fees difficult without a change in legislation.
Mr van Manen questioned whether ASIC had been proactive in working with the federal government to work towards legislative adjustment of the model, accusing the body of not being proactive in supporting small to medium advice practices.
“What representations have you (ASIC) made to government from a policy perspective?” Mr van Manen asked.
Warren Day, ASIC’s COO, insisted ASIC is indeed acting proactively in engaging with businesses and government to ensure a fair application of fees.
Mr Longo also advised that ASIC would hold a review of the cost recovery scheme next year.
Mr van Manen’s initial request for a detailed breakdown of costs was not able to be given in the hearing, with ASIC taking the request on notice.
A simple change in legislation would fix most of this. Apply the fees to those being charged and found guilty. The the advisers would only have to pick up the tab for those failed lawsuits and where there were lawsuits with regards to small to medium (dare I use the word independent/non-aligned) firms. Oh but wait, if the adviser levy is “for our benefit as an industry” why should we pick up the cost for failed/frivolous lawsuits brought about by ASIC? So what would the actual levy be if 1)failed lawsuits were not charged, 2) the big end of town picked ups the costs of ASIC for their legal actions as well as the fines, the ACL, again mostly big end of town, guys pick up their costs as well as any other action UNRELATED to advice and dealing, the superannuation and and product issuers picked up their own costs, we would be left with…oh, thats right around 1.3% of all complaints and issues!!
ASIC’s idea of engaging with businesses is speaking to licensees, like AMP, who simply push the fees to advisers, they don’t care as they don’t pay the fees. How ASIC makes any of these comments with a straight face is astounding. There is being “very alive” of the plight, but when you do absolutely nothing to fix the problem it proves how much you care. Longo and Press just want to collect the fees, from whom, they could care less. These fees make sure they keep getting paid their overinflated salaries and bonuses, all while clients are no better off. Great job ASIC.
It’s interesting in Covid times that the government can provide assistance based on whether a business is micro, small or more significant to the economy based on the size of its workforce or revenue for a period. Perhaps it’s fairer, Ms Danielle Press, when you think about the impact on small business that you think into how it can be equitable and use some measure, I don’t know…. like revenue, to assess the size of fees and apportionment.
Also interesting that the ‘big boys, big end of town’ whose businesses created the situation where financial advisers were a distribution channel. Their products were in conflict with the best interests of consumers, and now they have left town and left advisers holding the proverbial bag, and disproportionate bills, for their part in the FS debacle.
ASIC’s interface for licensees to update their details and provide reports to ASIC is one of the worst government websites in the world. They can get the Covid-19 websites done, and done well, in record time, but ASIC …
Yet another way to harm small businesses in addition to that small licensees pay double per adviser than the big end of town.
Danielle Press thinks about the impact of small business each day, chuckles, and decides to do nothing about it because it is above her pay grade.
Capacity, may be a better way to describe it!
she thinks… how she can wipe them out.
Yes, look at what they do, not at what they say.