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‘It’s simply not good enough’: Should big banks cover industry levy?

The Advisers Association (TAA) is calling for government relief for advisers and demanding that the big banks pay an exit levy as they abandon their wealth management businesses.

With the ASIC industry levy set to rise more than 60 per cent, TAA has called for an exit levy to be imposed on the big banks, warning that those responsible for “some of the poorest behaviours” are avoiding paying their fair share.

“The advisers remaining in the industry are those who are committed to the profession, who are committed to their clients and who are building strong practices that can withstand the changing times,” said TAA CEO Neil Macdonald.

“Expecting these advisers and their clients to just keep paying ever-increasing costs for the sins of the past, largely committed by the big end of town, is unconscionable.”

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TAA suggested an exit fee of as much as $7,400 per adviser for major banks and institutions looking to jettison their advice networks – a three-year multiple of the current levy, and one based on adviser numbers as at the date of the Hayne royal commission final report. They are also calling for the government to provide financial relief to advisers, allowing them to “pay a more reasonable amount in what is still a difficult COVID-19 environment”.

“We believe Treasury needs to take another look at this model and review the downstream impact of the levy on advisers and their clients,” Mr MacDonald said.

“The normal process before implementing this kind of burden would include a stakeholder impact analysis. That may not have happened in this case and there are now some unintended consequences.”

TAA said that while it supports a user-pays model, the original cost of $900 per adviser was “about right” in a normal market.

“What we have now is an abnormal market where the worst users don’t have to pay because they exited. They should not be allowed to just walk away from the levy scot-free,” Mr MacDonald said.

‘It’s simply not good enough’: Should big banks cover industry levy?
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