During Senate estimates in June, Liberal senator Jane Hume questioned Australian Securities and Investments Commission (ASIC) commissioner Alan Kirkland about the “quantified cost of enforcement” for unlicensed operators providing financial advice during the last cost recovery period.
Having taken the question on notice, ASIC has now detailed that the cost of enforcement work in relation to unlicensed operators in the financial advice sector was $4,488,157 during the 2022–23 financial year.
In its cost recovery implementation statement (CRIS) for FY22–23, attributed a cost recovery amount for the financial advice sector of $55.5 million. This figure was reduced by nearly $8 million to $47.6 million in November 2023, ultimately lowering the cost to advisers by around $400.
In the original CRIS, ASIC detailed that its total estimated enforcement costs for the sector was $18.2 million.
Senator Hume also asked Kirkland about the extent to which financial advisers and financial professionals report this activity to ASIC.
“I would imagine they’ll see an Instagram post or they’ve received an unsolicited phone call or whatever it might be. They realise it’s unlicensed financial advice and they report it to you. How often does that happen?” Hume asked.
Kirkland responded that while he would need to take it on notice, his engagement with financial advice industry bodies has shown unlicensed advice is a “matter of concern to them”.
“While I understand their concerns about the way in which the levies are allocated, they are also keen to see ASIC take action in relation to unlicensed conduct,” he told Senate estimates.
“For example, we’ve recently released some information on cold-calling practices in relation to superannuation. Some of that potentially involved unlicensed financial advice conduct. And in talking to organisations like the Financial Advice Association, they’ve welcomed us taking action in relation to those practices because of the harm it does to the industry, in general.”
In its response to the question on notice, ASIC said that about 12 per cent of reports of alleged misconduct it received for FY22–23 about unlicensed financial services were lodged by financial industry professionals.
“ASIC receives and records information about the reporter of alleged misconduct, such as being a financial industry professional, through our online electronic report of misconduct form,” it said.
“Where reports are received by other means, such as hard copy or email, our system does not record this reporter information.
“For the financial year 2022–23, ASIC received 563 reports of alleged misconduct about unlicensed financial services. Of these, 414 reports were lodged online and 12 per cent of the reporters identified themselves as being financial industry professionals.”
great!
Has anyone actually tried to report misconduct to ASIC online? Their website leads you in circles and I have never been able to locate the actual form
Then fine those individuals heavily for doing the wrong thing. Not the rest of us.
It should be irrelevant whether advice is licensed or unlicensed from an ASIC perspective. What’s relevant is whether the advice is harmful or not. ASIC should be protecting consumers from harmful advice, and should be funded by consumers (via the taxes they pay).
At the moment ASIC dedicates most of its resources to persecuting honest licensed advisers, rather than stopping the real sources of consumer harm. That is a failure to do its job. Then it charges honest licensed advisers for the privilege of being persecuted. That is beyond ridiculous.
Seems ASIC spends a lot of time targeting those rolling FUM from Industry Super – but I could be wrong? Protection Racket? Two tier Justice system?
it’s not Financial Adviser’s job or responsibility to report or to help ASIC in identifying possible unlicensed advice activity….it is the regulator’s responsibility to manage this surveillance and to protect the public.
In addition, is the cost of of the enforcement activity by ASIC of nearly $4.5Mill included as a cost to the Financial Advisers?
If so, based on 15,000 Advisers this would equate to approx $300 per Adviser for enforcement action against unlicensed operators!!
We must be the only industry where if you do the right thing, you pay for it.
And “Qualified Advisers” don’t pay?
Clearly everything is above board at Treasury right?
Yep….Treasury.
The black hole of invisible, silent whispers with no idea with what lies beyond the gates of Canberra.
Protected entity & protected individuals living in a protected world.
Yep – Weird isn’t it.
Every Govt for the last 15 years have wanted Financial Advisers to pay a price…simply for being in the profession!
There is a strange and unhealthy obsession that Govt have with the relentless pursuit and discrimination against Financial Advisers.
It borders simply on being ” seen ” by the public to be acting in their best interest by protecting the public from
…wait for it ( all Govt and media’s favourite term ” dodgy” advisers.
It is like a public relations exercise rather than anything to do with enhancing access and affordability of advice.
“ASIC receives and records information about the reporter of alleged misconduct, such as being a financial industry professional, through our online electronic report of misconduct form,” it said.
This way, ASIC staff don’t even need to get their feet of the desk and do anything?