Advice sector to refund ASIC $24m
The government has released a new proposals paper for the implementation of an ASIC user-pays funding model, which shows that the financial advice sector will be levied $24 million to refund the regulator.
According to the proposals paper, the industry funding model will recover the actual costs that ASIC spent during the financial year to regulate each sub-sector.
When it comes to regulating the financial advice sector, ASIC expects it will spend $24 million in 2016-17, 10 per cent of its total regulatory budget.
Personal advice providers on Tier 1 products will be levied the most at $22 million to recover ASIC’s costs, or $960 per adviser on the financial advisers register.
Meanwhile, personal advice providers on Tier 2 products will be levied $900,000. General advice providers to retail and wholesale clients will be charged $800,000 and wholesale advice providers to wholesale clients will be charged $200,000.
These levies are different from those in an August 2015 consultation paper, which proposed a levy on financial advice providers on Tier 1 products that involved a fixed component of $1,350 and a variable component of $470 per adviser.
“Submissions strongly opposed this model due to concerns it would place a larger burden on smaller licensees relative to larger licensees due to the fixed component. This concern has been addressed by moving to a fully variable levy,” the new report states.
However, the paper added that ASIC does not propose to charge a separate levy on robo-advice providers “at this time”.
The new funding model is part of a package of reforms the government announced in April in an effort to bolster the role of ASIC.
“The proposed industry funding model will include measures to support ASIC becoming a stronger regulator, through increased accountability, transparency and engagement with consumers and its regulated entities,” the paper states.
Submissions on the proposals paper will be open until Friday, 16 December, with a view to implement the funding model in the second half of 2017.
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