FPA warns against increased costs by ASIC user-pays model
The FPA has announced it will respond to the proposed ASIC user-pays model, while warning that any changes must not lead to increased costs to clients for financial advice.
In a statement, the FPA's chief executive Mark Rantall said the consultation paper – released last week by the government and seeking stakeholder views – estimated that under this model, a small self-licensed financial planning firm will be subject to costs of more than $6,000 per year.
"If this is to be the case, the Government must also consider the potential flow-on impact of increased costs of financial advice for consumers – especially at a time when the industry is already facing significant new costs relating to complying with other regulatory requirements," he said.
"The FPA will be responding to the consultation paper and will engage with industry and financial planning practices to better understand the cost imposed to their businesses under the proposed funding model. We will also be looking into whether there are better alternatives."
However, the FPA is not against an industry-funded model and it represents a way to "align the interests of ASIC and the financial services sector", Mr Rantall said.
"Our call for greater collaboration and co-regulation between regulators and the financial services sector included closer alignment of the goals and mechanisms of regulators and industry.
"The FPA believes that any funding model proposed should also deliver to consumers and industry greater responsibility, accountability and transparency on the part of the regulator. If this is indeed the outcome, we will have a level of assurance that the fees and levies charged are appropriate."
Meanwhile, the FPA announced that retirement and superannuation had topped the list of Australians' primary financial concerns, followed by investing in property and shares, at the conclusion last week of the 15th annual Financial Planning Week.
Mr Rantall said people aged 55 and older were the most engaged with the Financial Planning Week campaign, seeking answers to questions about how to prepare for retirement and how to maximise their retirement income.
"This year's Financial Planning Week made it clear that many Australians are concerned they won't have enough money to retire on, giving us specific insights into consumers' pain points and how financial planners might help alleviate that stress," he said.
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