Following questions raised by Liberal senator Slade Brockman, the regulator recently conceded that the advice sector had been charged for a proportion of its High Court case against Westpac that found the major bank’s call centre staff had given unlicensed personal advice to super fund members.
ASIC said actions related to unlicensed conduct were “in the interests of licensed participants in [the advice] sector, because it maintains integrity and trust in the licensed sector and deters competition from unlicensed and unregulated competitors”.
The regulator said both the super and advice sector had been charged for the case, however in a further response to Senator Brockman around the detail of total costs charged, ASIC revealed that the majority had been charged to advice licensees.
The regulator’s figures showed that 60 per cent of costs in the case had been charged to the advice sector, while 40 per cent had been charged to the super sector.
The total costs charged for the case over three financial years were approximately $600,000, with $264,712 charged in the 2020 year, $75,449 charged in 2019 and $261,419 in 2018.
ASIC said the costs would be “credited to the levied subsectors” once the case concluded.
“The Westpac personal advice super fund High Court case is still in litigation. No costs have been recovered by ASIC to date,” the regulator said.
“In August this year, the court will hear and determine what civil penalties should be imposed for the breaches of the law already found. Further orders will be made and then ASIC will be in a position to pursue recovery of costs of the litigation.”
The news comes following calls from industry bodies for ASIC’s funding model to be urgently reviewed, after the most recent estimate of levies for the 2021 financial year showing costs charged to the advice sector had increased by more than $16 million.
Let’s be truthful ASIC the Royal Commission was your wake up call from your easy grab from the public purse , then to rub salt in the wounds because you were forced into action against Banks you hit the Financial industry for your failures. You still continue to pay lip service to breaches by Industry Funds. Nothing really changes just public servants on the gravy train.
Costs will be credited back in a few years, what about the fine received on top?
The big banks are playing this perfectly. Watch them come back in a few years, with a digital/call centre based advice offering, with alot less competition, ie non bank advisers.
What is currently being done to SME’s is hideous.
Another prediction….Josh Frydenberg ends up with some sort of very well paid board position at a bank or bank association post politics for a decade or two. He has blood on his hands.
Sounds like a great plan designed by lawyers.
The government needs to ask itself why small advisers who have no relation to Westpac have to foot the bill for this case.
I suspect the original idea came from Treasury – and the Liberal went with it. Election now approaching, and I suspect Treasury have secure jobs – but not the Liberals. Makes you wonder.
Treasury/Finance would have only come up with it because the Government would have asked how they fund it without costing them anything. Government could have also said no.
The blame for this ridiculous situation sits on the shoulders of the current government. They have made it clear that their priority was/is in making their budget look good, even at the expense of small business.
This is Madness, $600,000 to be charged to Advisers who didn’t cause the problem. And this is but on case. Advisers need to struggle to stay in business to pay for the sins of others. Did I mention this is madness!
The lawyers are always the winners.
A blatant failure to have any body properly advocate for the needs of Advisers.
I’m still not sure why ASIC isn’t funded by general revenue, given that it is to protect the public at large. What am I missing?
It is all about protecting the Government’s budget to try and make them look better than what they are.
And what would happen if every Adviser in Australia sent ASIC invoices for the time it takes to follow their ridiculous requirements around FDSes, Opt-Ins and even SoAs that clients DON’T WANT and therefore SHOULDN’T HAVE TO PAY FOR?
They spent $600,000 – will they get more than $300,000 back? You usually don’t get more than 50% of your costs back. In other words, we will pay $300,000 when we win and $1 million or more (Westpac’s costs could well be much higher) if ASIC had lost.
“The regulator said both the super and advice sector had been charged for the case, however in a further response to Senator Brockman around the detail of total costs charged, ASIC revealed that the majority had been charged to advice licensees.”
And none of the licensees charged were involved in the case. It was all Westpac and its internal staff. That’s what’s so atrocious about all this.
ASIC must be made to stop robbing advisers and licensees who have done no wrong. There is no natural justice at all here.
Disgraceful….and what was Slade Brockman’s reaction to this information????
If this case doesn’t show how broken the funding levy process is then nothing will.
How is it possible that a case against Westpac means that “all” the advice industry needs to suffer?
ASIC, you need to fund your own cases not us, particularly when we have no say in the matter/s.
It is frankly unforgivable that the Liberal Party has made small financial planning firms fund a government bureaucracy like ASIC.
No government bureaucracy controls their expenditure, and ASIC have been given a blank cheque. They WILL drive the financial advice sector into oblivion.
So what’s next?
We are going to direct the police to charge industry sectors where criminals operate because somehow the legally compliant participants in an industry should pay for the societal benefit of dealing with criminals.
Westpac’s board are not alone in the direction of staff to push the envelope. However as directors of a public company they know that some poor employee will pay the personal price and the shareholders will pay the financial price. ASIC can’t even bring the real crooks to account so why would they not charge the wrong people for the job?
If ASIC ran local councils they would go into a street, knock down non compliant buildings, and then charge the other residents in the street for the benefit of imposing its views as to what can be built or not.
The ASIC funding model is bizarre and how a Liberal government can defend it defies belief.
ASIC: “in the interests of licensed participants in [the advice] sector, because it maintains integrity and trust in the licensed sector and deters competition from unlicensed and unregulated competitors”.
Adviser: These levies also deter me from being an adviser and students are better off studying for legal and public service
“Makes perfect sense, ASIC”…said no adviser, ever.
So those that hang around to build businesses for the future (despite all the regulation) pay for the sins of those that have left / retreated / been run out of town…… Makes sense doesn’t it.
What about when ASIC continues their witch hunts for no prosecution – no accountability really – as they can keep spending, with no limit, on someone else’s dime – sounds like a conflict of interest really…