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.
Looks like my fees just went up
Well, my hourly rate just sky rocketed. So much for affordable advice for clients
Just another nail in the coffin for Independent advisers, the Banks will soon be in total control with their vertical integration models to provide advise to increase their own bottom line with NO benefits at all to the consumer. Good one AFA and FPA for selling out advisers and the Australian public !
This so called levy is nothing but business taxation in disguise. I expect to get a bang for my buck when paying a tax . And what will I and my peers get. ? Absolute zip. You would think our prime associations would fight this tooth and nail., but instead come out with the idea of a discount idea for good behaviour. practioners need to get some balls and harass the powers to be to stop the nonsense pervading this industry.
The article also overlooks that many advisers also can pay around $11,000 plus on top of the Fee for various compliance consultants for outsourcing the process for assistance in setting up the AFSL. Essentially another impost on small business trying to make a start. Many smaller business no doubt will stick to the AMP’s.