The government will soon start looking at ways of increasing the AFSL application fee, which could potentially rise to $11,000, says one financial services lawyer.
In August 2015, when the ASIC industry funding model was first introduced, a consultation paper proposed increasing the AFSL application fee to $11,000, up from the average $846 fee. This includes limited AFSLs.
The paper also proposed lifting the fee for variations of AFSL authorisations and other conditions from $255 to $6,900.
In the latest proposals paper, released in November 2016, the government said it decided to delay the process of determining application fees so that it can gather further data that will support the need to increase the fees.
Now, that consultation process is slated to begin again after 1 July 2017, said Sophie Gerber, director at Sophie Grace Compliance and Legal.
She believes the increase in fees will likely thwart the IFA movement.
“I think it will impede [the trend] for some time. We find that financial planners are really cost sensitive when doing their AFSL application, much more cost sensitive than fund managers and others who need AFSLs,” she told ifa.
“I think it’s a shame because it will discourage people from getting licences.”
Ms Gerber’s comments come after the government recently released an exposure draft of the ASIC industry funding model, setting out the penalties that licensees could face if they miss a payment.
Under the model, the advice sector will be levied $24 million to refund the regulator, or $960 per financial adviser.
ifa reported in January 2017 that the AFA and FPA called for the ASIC funding model to include discounts for good adviser behaviour as well as for those operating in regional areas.
This followed an Interprac Financial Planning manager expressing concerns to ifa about the extra costs being imposed on the financial advice industry due to new legislation, saying it will lead to a mass exodus.
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