In a statement last week, Mr Kewin said the ASIC Supervisory Cost Recovery Levy Bill, which was introduced into parliament recently, is unfair on advisers who are doing the right thing.
“There are currently no provisions to provide discounts for those advisers who are doing the right thing,” Mr Kewin said.
“This seems unfair, particularly when all advisers have already had to bear a raft of costs, including increased professional indemnity insurance premiums and costs associated with upgrading fee disclosure statements and incorporating opt-in arrangements.”
In its submission to Treasury on the bill, the AFA said any further increase to the cost of providing advice is likely to put quality financial advice out of reach of those who need it most.
“Financial advice should not just be for the wealthy and this model should not unintentionally facilitate that outcome,” the AFA said.
The AFA is also concerned that unless these ASIC levies are capped, there is no provision to contain the costs passed on to advisers.
There should be discounts for advisers doing the right thing, capping of increased costs and a minimum five-year review, the AFA said.
Memo for the politicians :
1. Many advisers particularly those that are self employed will pass the cost of this tax (aka industry funding model) back to their clients
2. It does nothing to help promote more Australians obtaining advice so the numbers needing Centrelink support will just grow larger
“Anonymous” – The AFA (nor FPA for that matter) didn’t “stitch up” anyone. The position taken by the AFA on LIF was a compromise position between the then status quo of “no change” (which wasn’t going to be swallowed by anyone) and actually a far worse position which would have been imposed on the industry. Sure the outcome wasn’t the 50% balance of what the AFA ideally wanted, but it was better than the alternative. When you have government wanting to mandate legislation for the appearance of “doing something” whilst trying to placate the regurgitated dog’s breakfast that is the Senate, the best the associations can hope for is to influence the outcome. There’s no way the government of the day was going to back down when you have Labor, The Greens, Xenophon, Lambie et. al. all jumping on the populist consumer rights bandwagon leaving the Government with little room to manoeuvre and being forced to agree to compromised policy positions in order to achieve other concurrent political outcomes. Has “Anonymous” heard of “fee for service”?
Appreciate Mr Kewin may be trying to say the right thing in the new job but its too late. The stitch up by his predecessor in collusion with the FSC means risk advisers are down by half income in the future and many won’t survive. A $960 fee from ASIC may be wrong and insulting but its irrelevant by comparison to the losses through the LIF. The AFA and FPA can never recover from this and nor can the members. Whatever the AFA say from now on is as irrelevant as the organisation.
Great idea Jason!!
Well said Phil and like Jason’s comment on the “No claim bonus”
Good call Phil! Perhaps we could have a “No claim bonus” type scheme where good advisers are rewarded with a 10% discount each year upon renewal cumulative up to a maximum of 5yrs (50%). This would also save large licensees considerable $$$ and perhaps be a financial incentive to ensure good behaviour. Seems to be a fair balance of the carrot & stick approach.