An industry-wide backlash has emerged since the federal government proposed plans for an ASIC user-pays model.
Calls for the industry to begin funding ASIC's regulatory activities follows recommendations made by the FSI. Former assistant treasurer Josh Frydenberg released a consultation paper in August seeking stakeholder views on the proposed model.
However, according to the latest ifa straw poll, more than 82 per cent of respondents do not believe a user-pays model for ASIC is a good idea. This contrasts with 17.2 per cent of respondents who do agree with the concept.
Outside of the poll, others have expressed confusion as to how this structure is expected to work, including Governance Institute of Australia, which said yesterday that the consultation paper lacks detail.
"We need more meat on the bones of the proposal," Governance Institute chief executive Steven Burrell said in a statement.
"We need to know why this particular model – as distinct from alternative models working well in other jurisdictions or other possibilities that may have been canvassed but not disclosed – is better placed to improve or enhance the integrity of our markets. The consultation paper fails to do that."
Meanwhile, Evalesco Financial Services' director Jeff Thurecht said that while he understands a need for the regulator to be better resourced, he doesn't see how the proposed structure will help ASIC be more effective.
"How will accountability improve if ASIC becomes answerable to a disparate group of industries and participants?" Mr Thurecht told ifa.
"My fear is that the only tangible change could be an increase in costs to licensees, advisers and ultimately consumers. This would be hard to take without any clear improvement in outcomes for consumers or more effective enforcement of inappropriate conduct at all levels of the industry value chain."
The FPA has also raised concerns about increased costs to clients for financial advice. The FPA's chief executive Mark Rantall said the consultation paper 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 user-pays model was introduced as a way to provide "more funding certainty" to ASIC, according to Mr Frydenberg. It has also been supported by ASIC chairman Greg Medcraft and the Financial Services Council.
"We have enough laws in place already to ensure consumers are protected. ASIC needs to focus on its role as a corporate regulator to enforce these laws and it needs to be properly resourced to do its job," said FSC chief executive Sally Loane.
The closing date for submissions to the consulation paper was 9 October 2015.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 16 Aug 2017UBS appoints head of wholesale distributionBy Staff Reporter
- 17 Aug 2017Formerly banned adviser to face further ASIC chargesBy Staff Reporter
- 16 Aug 2017Challenger announces ‘strategic relationship’ with Japanese insurerBy Staff Reporter
- 16 Aug 2017Income protection insurance launched for on-demand workersBy Staff Reporter
- 17 Aug 2017New evidence for self-licensing surgeBy Aleks Vickovich and Linda Santacruz
- 16 Aug 2017RegTech to reduce adviser misconductBy Aleks Vickovich and Larissa Waterson
- view all