On Monday morning, Treasurer Josh Frydenberg delivered news that advisers have been anticipating for some time – announcing that the cost of levies charged by ASIC will be temporarily reduced.
As such, levies charged for personal advice to retail clients are set to be restored to their 2018-19 levels of $1,142 per adviser for the next two years, while levies charged per licensee remain at $1,500 as opposed to the $3,138 ASIC was readying to seek.
Adviser Timothy Munro applauded the changes, noting that “we’re starting to see some common sense with the way financial advisers are treated”.
“This announcement will reduce the ASIC levy by approximately $2,000 per advisor which is brilliant. Any extra costs put onto advisers need to be charged to clients at the end of the day, so it’s a win for clients as well as for advisers,” the chief executive of Change Accountants and Advisers said.
While Treasurer Frydenberg did announce a complete review of the ASIC Industry Funding Model will commence in 2022, Mr Munro said he would like to see the government re-examine the “entire way” financial advice is provided to clients.
“Mums and dads of Australia are fed up with being given massive documents like Statements of Advice that they can’t understand and rarely read when they may have requested relatively simple financial advice,” Mr Munro explained.
He also stressed the need to involve smaller advisers in any future government discussion on improving the financial advice process.
“In the past it’s been driven by the large financial advice companies, big banks and their lawyers and they’ve obviously pushed for things that were in their interest, not in the interest of smaller advisers and in hindsight obviously not in the interest of the average Australian needing financial advice,” he said.
Similarly on Monday, the Institute of Public Accountants’ policy leader Vicki Stylianou welcomed the relief to advisers, noting that it’s “exactly what practitioners have been begging for the last three years, at least”.
“It is encouraging to see the government and ASIC undertaking practical measures to reduce cost pressures on financial planners and tackling the compounding effect of new regulation and overall inefficiencies in the system,” Ms Stylianou said.
“The quality review which was already scheduled for next year, and may include a holistic review of ASIC’s funding model, is incredibly important in assessing impact on industry. But it must be a genuine cost benefit analysis.”
The IPA teamed up with its peers – CPA Australia, Chartered Accountants Australia and New Zealand – in a join statement on Monday afternoon to urge the government to extend this relief to all financial services participants, not just financial advisers.
“This will provide widespread regulatory certainty while the profession awaits the review of the ASIC Industry Funding Model,” the bodies said.
ASIC fees for financial advisers have increased by more than 230 per cent over the past three years and contributed to the decrease of financial advisers to just over 19,000, a loss of more than 2,000 since November 2020.
With 46 to 54 2PP, thanks to Frydenberg foolishly allowing the bureaucrats to take over, Labor is now set to win in a landslide
The only reason that things changed is because the polling that Josh Frydenberg has been running tells hiim that half a million votes that were Liberal last time in the Financial Services Industry were moving to the ALP as everyone was sick of being screwed. Josh has killed the Life Insurance Industry as it was his decision to push down commissions which seemed a good idea at the time. Now with Life Insurance sales falling by 75% in the past year its not such a good idea as the tax take has crashed along with the GST. Another dumb Josh decision driven by bad advice. Regulators have gotten stuck with it.
So when Josh cranks the commissions back up to 120% of first year premiums for Life Insurance then he may get the votes and the market back but if he does not, then no more Liberal Government and goodbye Josh.
Goodbye and good riddance to the most inept treasurer since Wayne Swan…
Agreed Frydenberg has been an Adviser disaster for the past 8 years.
Out with Frydenberg and take your puppets with you like Ms Hume.
Disgusted in these LNP clowns.
Helen and Phil, forget the FPA, we need an equivalent loud voice now that unfair policy is killing small independent advisers and ultimately their clients, please keep the momentum thank you
It’s not unfair policy. Just adapt and move on. Invest in new technology to reduce the workload or sell / merge with a more future ready practice.
We have one. They are called the AIOFP and only advisers can be a member. They are great lobbyist for advisers
It is up to the smaller advisers to band together to become a force. This could be via the FPA, if it changes its mandate to advisers only, or the AFA. Currently smaller licensees mainly use the FPA but are lost in the unclear mandate of the FPA.
Advisers have been banded together through both of these associations for years and look where that has got us. The AIOFP has done more direct/appropriate lobbying for advisers than both of these associations for years. Hopefully the new AFA CEO will turn things around for their advisers, but don’t hold your breath for the FPA to pivot quickly-best thing their existing members can do is get out!!
Really FPA ?
AFA is running a great PR campaign, for themselves.
AFA’s latest recruitment is a statement in itself as to its policy direction.
CAANZ and CPA lost the plot decades ago pushing practitioners aside for academics and bureaucrats who just perpetuate more non real world solutions.
FPA. AFA and others are so beholden to product manufactures they can never start from where it all has to be rebuilt.
If product manufacturers were truly held accountable, and ASIC did the job of holding the manufacturers accountable, then the need for a compensation fund could be appropriately resourced and funded by product manufacturers.
You also would not have PII underwriters abandoning the market or charging out of proportion premiums to cover the quagmire of consumer remedies that have nothing to do with the actual advice provided.
The model has to be rebuilt from the ground up, and if you did so, the remedies would be very different.
However no academic or bureaucrat is going to do themselves out of a job, so don’t expect any material change from the current crop at the top.
Please no. There is no place for small advisers in our new world. You need critical mass to provide the best most compliant reliable advice to clients.
I think FPA a waste of time, perhaps some hope with the AFA, Advisers need to become vocal but not just them but their clients as well where possible. Multiply adviser numbers by 100 and you have a voice. Politicians only respect numbers and retention of their seats.
The FPA is not the solution. The FPA has now thousands of advisers that work in telephone based advice, where TelstraSuper, Hesta, AwareSuper etc etc has signed them all up to the FPA and paid for their fees….The needs of the Adviser that providers face to face advice is very different to AwareSuper’s needs and their big enough to look after themselves. The FPA is openly advocating for those “call centres” to expand the intrafund advice carve out.
Every knee-jerk legislative reaction by the Gov’t (usually driven by institutional misconduct) has only caused serious harm to the Advisers doing the right thing and moreover fewer Australian’s able to access desperately needed financial planning advice for their and their families’ future financial security. To add ‘insult to stupidity’, the remaining good advisers have to pay ASIC thousands of dollars a year for the misconduct of others. The result of the Gov’t’s misfired legislation, which has caused Australians more harm than good, thanks to this mismanagement, we now have 10 to 12 thousand fewer advisers to police, so if ASIC were honest, their size and costs should go down proportionally. They have broken the industry through scatter-gun blast legislation and one of the most vibrant economies in the world has a basket-case of a financial system limping to its demise. After all this toxic damage, ASIC are now concerned about the affordability of advice – yet they have caused this huge problem by not listening to Advisers in the first place!
I can’t agree. Advisers and licensees bought this on themselves. The industry pretty much self regulated for decades and at all levels, yes including advisers, were about their incomes first and clients second. There are some outstandingly good advisers but even now there are too many average advisers spending too much time complaining about changes and pressure now being placed on historically inflated incomes.