On Thursday (11 November), in its cost recovery implementation statement (CRIS), ASIC said the “decision to cap levies” and with an estimated 18,750 advisers and 2,934 licensees operating, $25.8 million will be recovered for the year.
“Under the industry funding model, all entities in this subsector pay a minimum levy of $1,500, and a graduated levy based on each AFS licensee’s share of the total number of advisers registered on the financial advisers register at the end of the financial year,” ASIC said on Thursday (11 November).
“This is because the greater the number of advisers, the larger the number of clients able to be serviced and the higher the level of regulatory oversight required.
“A licensee will only pay the levy in proportion to the number of days in the financial year that they held the relevant AFS licence authorisation.”
Among the respondents in the CRIS feedback included the Financial Services Council (FSC), the Association of Financial Advisers (AFA), the Financial Planning Association (FPA) and the Stockbrokers and Financial Advisers Association (SAFAA).
In July, it was revealed that costs allocated to the advice sector by ASIC grew by over $16 million to around $72.2 million.
Of the $55 million, $16 million came from enforcement, $8.3 million from supervision and surveillance, and $22 million from indirect costs including governance, property and IT support.
In regard to licensees specifically, estimated levies to recover costs for 2020-21 have also gone up from $2.1 last year to $2.2 million.
ASIC said moving forward it will focus on the conduct of licensees to identify any potential harms “that threaten good investor and consumer outcomes” and remains committed to implementing the financial services royal commission recommendations.
The actual levies are set to be published in December 2021 and invoiced in January 2022.
I so, so wish advisers could make the rules up as we go along – JUST LIKE ASIC DOES everyday.
What a pathetic, corrupted and unethical organisation – run by people with equal character traits.
“This is because the greater the number of advisers, the larger the number of clients able to be serviced and the higher the level of regulatory oversight required.
Sounds more like the % of FUM argument – didn’t someone say it is conflicted? Perhaps ASIC could just charge for any beneficial advice that they may provide preventing consumer harm. ASIC can pay for the unlicensed sector.
how did it ever get to this real messy situation..?
I would say because advisers were takin the mickey?
So $4,4M will be recovered from the licencees, meaning ASIC expects to recover $21.4 from advisers which calculates to being $1,141 per adviser…if there are 18,750 of us left…
If the numbers drop to 13,000 ASIC will either under recover $14.8M ($6.6M less) or the remaining advisers will be expected to up their contribution to make up this shortfall? Thats an extra $500 per adviser…
The numbers will drop to 10,000. No one is entering the industry. Why would they ?
Valid, but also there are many PY candidates (some are naive Graduates) that are climbing over each other for a willing licensee.
That has been happening since the PY legislation came in to play… and how many candidates have actually completed the PY in that time? It’s no use having people willing if there’s no one to support it. They will lose their motivation quick smart
Given the way regulators are making it difficult for consumers to access professional advice, while at the same time allowing dodgy unlicensed advice to flourish, 10,000 licensed advisers will be about the right number to meet the reduced demand for professional advice.
Advisers ejected by FASEA and graduates who can’t get a PY placement will migrate to regulatory preferred “advice” channels like Tik Tok, real estate, mortgage broking, or union super sales.
The federal Liberal government fully support Big Government. They are the government of Big Government. This is why ASIC have been allowed to grow as much as they have.
If you want an example of fee for no service you have it right here with ASIC.
But ASIC are apparently making it easier to give advice. Another example of why financial planning is dead
The problem with this system is not necessarily what it costs to adequately supervise and prosecute the wrong doing. The problem is the industry is being asked to foot the bill for all of these activities, but when costs are recovered through successful prosecution, while the industry pays for the prosecution expenses, all proceeds go back to general revenue. Nothing is offset. So the exponential growth in ASIC costs are simply a huge tax on business with zero upside (as its usually the good businesses who are still around, paying for the bad).
$22m in indirect costs. If this was an SOA they’d be no way they’d meet the BID switching rules! How about ASIC stops spending so much money on fixing paper jams!
by putting more paper jams in place 😉