MP Bert van Manen questioned why the cost of ASIC’s actions – which it says are primarily targeted at the big end of town – are borne by smaller financial advice practices through the industry funding levy, and whether the regulator could shift its cost recovery efforts to the large institutions.
But ASIC commissioner Danielle Press said that the timeline of enforcement actions against those institutions made it difficult to recover costs ahead of time.
“There is a delay in (cost recovery), because the litigation costs are incurred today – they’re not recovered until the litigation is successful, which is two to three years’ time. There is a challenge in the advice sector today which I feel is very specific – a lot of it is about the model itself, which is out of our control,” Ms Press said.
ASIC chair James Shipton said that ASIC was “very focused” on the issue and wanted to work with the financial advice industry to reduce some of the costs, and was also open to receipt of applications for financial hardship.
“There is a horrible lag. When we recover from the big end of town, the small end of town doesn’t see that coming off their bill for a couple of years,” said ASIC deputy chair Karen Chester.
The industry funding levy has increased from $276 million for 2018-19 to $320 million in 2019-20 – the “lion’s share” of which has come from costs associated with the Hayne royal commission. But ASIC believes that financial advisers will see a fee reduction as it finishes enforcing cases from the royal commission.
“[The levy] should come down because the misconduct legacy is being removed from the system, and going forward we want to see it reduced by what we’re trying to do – we don’t have the policy levers, but we certainly have the levers of what the cost of our enforcement action,” Ms Chester said.
ASIC also said that it had received 469 submissions to its consultation paper on access to affordable advice, with 244 of those being from financial advisers.
“A lot of the issues raised were ones we’d heard already, but it’s terrific to have them in one place and to now be able to address them,” Ms Press said.
“We did give the industry associations a high-level briefing of what we found in the consultation and some of the things we’re considering and hoping they can give us feedback on what would be helpful. We’ve also provided that high-level briefing to Treasury.”
I have lost total Confidence in ASIC !!
The comments are clearly divisive and typical public service blame game !!
Sending small businesses out of business
Yet, ASIC can afford to pay immense annual bonuses to public servants on guaranteed contracts to administer private enterprise businesses. Why do they need bonuses?
So just to be clear, small business must pay for big business misconduct. Sounds fair. Everytime I hear liberals say they are for small business and cutting red tape I taste a small amount of vomit in my mouth. I will never vote for them again nor labour, cross bench all the way. I hope the cross benchers make their lives hell.
I would caution any planner or AFSL who try on financial hardship with ASIC to reduce this burden. I wouldn’t want my planner/AFSL to go this route as the capital/liquidity parts of running an AFSL May come into question
They would also be making themselves a prime target for future ASIC persecution. It’s like the Stasi inviting opponents of their methods in for a “friendly chat” to discuss them.
Does ASIC not understand their own requirements?.
“ASIC was “very focused” on the issue and wanted to work with the financial advice industry to reduce some of the costs, and was also[b] open to receipt of applications for financial hardship.[/b][b][/b]”
The people ASIC are charging are the dealer groups and licence holders – if they apply for financial hardship then surely they should NOT have their FS70 form signed of by the auditor and will have to hand their licence back.
“A lot of the issues raised were ones we’d heard already, but it’s terrific to have them in one place and to now be able to address them,” Ms Press said.
I’ll bet my ASIC adviser levy on them doing nothing about the concerns.
why cant the banks Cough up for the next three years based on the adviser numbers they had 3 years ago..want to get out of paying the levy? Just shut up shop…incredible and is if fees will ever go down
It still seems that ASIC don’t really understand the workings of Financial Planning Practices and believes that we have the money to fund them. We don’t! This will be one of the issues that forces advice businesses to close.
They do understand. They know we don’t have the money. They want advice businesses to close. It’s all very deliberate. ASIC has a pathological hatred of all financial advisers and will abuse their power to persecute them any way they can.
The only solution is for the government to disband ASIC and replace them with a genuine financial consumer protection agency. ASIC is a rogue regulator, that is not serving the needs of Australian consumers.
ASIC’s fees will NEVER come down. There will always be more excuses.
It’s not right that I pay for AMP and the banks. This is shameful.
It is right…
No matter what happens in this industry, its always the same group of people that cop it – the small independent (non-aligned) adviser who’s simply just busting his backside for his clients and trying to keep his business afloat.
It just absolutely sucks being an adviser now.
I’ve had 1 complaint in 15 years and that was immediately dismissed as rubbish and my clients claims are always paid on time (some getting far more than they or I expected) yet all I get in return is added costs, more compliance, less money, more unnecessary time added to my processes and accusation after accusation from nuffies outside the industry with no clue whatsoever that I’m somehow being dishonest.
I used to love what I do but thanks to ASIC and what they’ve done to this industry the last 5 years, I absolutely hate it now.
It wouldn’t matter if I was the only adviser left in Australia; their interference has resulted in me not being able to get the work I need to do for my clients done in a timely manner anymore. What used to take less than 6 hours, now takes 18-24. It’s just ridiculous and now they want to justify STEALING $2,492 from me.
I absolutely hate you ASIC and everything you stand for. Thanks for screwing my business into the ground.
Wow. Just as we suspected. Small end of town will be paying for the big end of town “for years”. It’s the Australian consumer who will end up paying if we have to pay. Unless the Government puts in.
It’s all very well to say that adviser levies will come down in the future. (I don’t actually believe that, because ASIC will find other ways to spend my hard-earned money.) By the time ASIC gets to the end of its Hayne related enforcement and looks at the amount of the levies again, I’ll be out of business. What good is this to me? I won’t get any refund for the exorbitant amount I have to pay now and for the foreseeable future. I would like justice for the small end of town now.
How corrupt. They acknowledge the issue, but we still want to get paid, so bad luck you are still paying to fund ASIC (and Shipton’s own personal tax advice). But don’t worry the fee will come down, maybe, at some time we just can’t tell you when. What about the fines the banks pay got towards paying ASIC fees, and then the advisers paying ASIC bills now can get a refund.
Yes they get bonuses, read their annual report
We’ve got the government we deserve (and most of you voted for) and they’re very cosy with the big end of town, so they’re unwilling to force their mates to pay-up. When I read the adviser comments from these pages it’s clear that few would consider voting Labor. QED. Good luck with that. I think it was Einstein who suggested that the definition of madness was doing the same thing over again but expecting different outcomes…
when is asic going to admit they can’t regulate efficiently and put up the white flag ? why penalise good people it is unethical. That behaviour would represent accountability and some qualities of leadership so that their smurfs (sing along la la la la la) also understand things like this hurt.
I very much doubt if we will ever see a reduction in levy as a result of final remediation. In addition, there is no doubt that licensee fees will continue to increase. The sad indictment of this process is that financial advisers who have conducted their business in a professional manner and met all service requirements, will once again be forced to bear the cost of the few unscrupulous cads who have complete disregard for the impact on our industry.