The cost of regulating the total financial advice sector will come close to $30 million, according to ASIC, which is expecting to recover most of that sum from financial advisers and licensees that provide advice to retail clients.
ASIC announced that it had forecasted the costs to regulate the sector would be $29.5 million but this would also cover licensees that provide personal advice to retail clients on products that are not relevant financial products, licensees that provide only general advice and wholesale advice providers.
The bulk of the regulator’s costs, $26.15 million, would be directed towards overseeing licensees that provide personal advice to retail clients on relevant financial products and their authorised representatives – financial advisers and planners.
ASIC released the figures recently as part of a Cost Recovery Implementation Statement (CRIS) which stated the $26.15 million would be recovered from the 2,895 licensees and 25,406 advisers providing personal advice to retail clients.
“… 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…”
As previously announced (see: Advisers and Licensees To Pay Under ASIC Funding Model), licensees will pay a minimum levy of $1,500 each, which would total around $4.34 million for all the retail advice licensees currently registered with ASIC.
This would, in turn, reduce ASIC’s costs to $21.8 million or $858 per adviser which the CRIS states would be charged to licensees as “…a graduated levy based on each licensee’s share of the total number of advisers registered on the financial advisers register”.
“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,” the CRIS stated.
Licensees would also only pay the graduated levy for advisers in proportion to the length of the time they were authorised to provide advice, the document added.
ASIC stated the figures supplied in the CRIS are indicative and may change when compared with actual costs for the period.
Does ASIC charge accountants and lawyers, doctors and dentists, mortgage brokers and bank managers a fee for overseeing their legalities?
Then why pick on advisers and adversely affect the Australian consumer with more costly advice which is likely to lead to less advisers in the industry, and more underinsured consumers.
This is just the government offsetting costs and imposing overarching control.
Meanwhile the fools in Canberra continue to fiddle while Australia burns. Bloody idiots!
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