A number of advice and accounting industry associations have expressed their disgust at ASIC’s drastic levy hikes for the 2020 financial year, with some corners of the industry suggesting they may refuse to pay the regulator’s invoices.
In a joint statement, the FPA, SMSF Association, Chartered Accountants Australia and New Zealand, CPA Australia and Institute of Public Accountants said the increase – which had been revised up more than 60 per cent on ASIC’s June estimations – was “shameful” and a review into ASIC’s processes should be immediately initiated.
“The government should reduce or remove the latest industry funding levy increase,” the group of associations said.
“ASIC’s industry funding levy must reflect the cost of regulation and not fund other budgetary measures.”
The associations said hikes in the supervision levy of 160 per cent over the past two years for the advice sector did not make sense given that adviser numbers were “nosediving”, and that those remaining in the industry were being “left to shoulder a disproportionate cost burden” as the major banks exited.
“The industry funding model has not changed despite major shifts in the financial advice sector,” the group said.
“For example, banks have largely ceased operating financial advice businesses. Yet ASIC’s budget to oversee financial advisers has increased from $25.6 million in 2017-18 to more than $56 million in 2019-20. This is largely due to supervision and remediation of historic deficiencies in the banks.”
AIOFP executive director Peter Johnston also questioned how the regulator could justify the “savage” levy increase given that “all the costly surveillance and litigation over the past 12 months has been against the institutional sector”.
Mr Johnston said he had had a number of members suggest that “advisers should band together and collectively not pay”.
“We don’t recommend such action – there are better ways,” Mr Johnston said.
“The only time politicians and their advisers start listening is the lead up to an election. All advisers need to start educating their clients that this ASIC levy and other compliance costs will increase their fees and they need to put the politicians on notice to desist or suffer the consequences at the ballot box.”
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