The AFA and FPA have called for changes to the proposed ASIC levy on financial advisers as part of a new industry funding model, including discounts for good behaviour as well as for those operating in regional areas.
In November 2016, the government released a proposals paper for the new ASIC funding model, which shows the advice sector will be levied $24 million to refund the regulator, or $960 per financial adviser.
In a submission to Treasury last month, the FPA said there needs to be consideration for those advisers who operate in regional areas and generate lower revenue than their metropolitan-based peers.
“Australian Bureau of Statistics data shows that the average income in most regional areas falls below the relevant state average and the relevant capital city average,” the FPA said.
“Due to the disparity in revenue between regional-based and metropolitan-based financial planners, the ASIC industry funding levy will have a greater impact on regional financial planning practices.”
The FPA also recommended that the financial levy be reduced to remove the cost of ASIC enforcement activity.
“The financial advice levy must not include any ASIC regulatory activity earmarked for funding under the government’s $121.3 million over four years to ‘improve outcomes in financial services’,” the submission states.
In its submission, the AFA recommended there be rewards for good compliance that leads to less burden and costs for ASIC.
“The AFA considers that if cost recovery is the primary aim of the model, the levy system should reflect where the costs are being expended with a behaviour-based system to reward good behaviour with discounts on annual levies…” the submission states.
The AFA also argued that there needs to be consideration for small advice firms that support new advisers.
“Small business practices must not be unfairly burdened by being required to carry the same averaged load as larger or institutional licensees,” the AFA said.
“As the advice profession regenerates over the coming decade, the profession needs to remain attractive to new entrants and to support experienced advisers who impart their craft on the next generation.”
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