The cost of applying for an Australian Financial Services License (AFSL) will more than double under the changes proposed in last night’s Federal Budget.
Companies applying for an AFSL under the new scheme will be charged $1,485 (up from either $287 or $575, depending on the method of application) and individuals will pay $825 (up from either $159 or $351). Similarly, the annual lodgement fee for an AFSL holder will also increase, to $549 for companies and $225 for individuals.
The increase in fees coincides with a funding boost to the Australian Securities and Investments Commission (ASIC) of more than $180 million over four years. The Government says the new ASIC funding will ensure that the regulator is appropriately resourced to continue its strong, proactive and consultative oversight of Australia’s financial markets. The funding includes $23.9 million to facilitate the implementation of the Future of Financial Advice (FoFA) reforms.
The Financial Planning Association’s General Manager Policy & Government Relations, Dante De Gori, welcomed the increased funding, saying it was a clear acknowledgement from the Government that the FoFA reforms are going to cost the industry money.
However, he raised concerns about these costs ultimately being passed on to consumers:
“If you think about the typical financial planner, especially those that are running their own license or the boutique licensees, this is yet another cost on top of the costs already associated with regulatory change, as well as the GFC costs and the everyday costs of running a business.
“Those costs will be passed on to consumers, so given one of the (FoFA) policy objectives is to improve access to advice… you have to question in the short term whether that’s going to be achievable.”
The Association of Financial Advisers CEO, Richard Klipin, echoed these comments, saying the increase maintained the high cost and the red tape on small business financial advisers.
“When you add these costs to the overall cost of FoFA implementation, costs across the sector are skyrocketing and ultimately we’ll see much of this cost borne by consumers.”
Everyones costs will rocket,there are no winners at all in this,the Industry is already way to over regulated as it is,they just keep fiddling like a nervious school kid about to face the headmaster,the bulk of FOFA is nothing but total overkill and crap,maybe i am new to change,I only came into this Industry in August 1977.
Cheers all and good Luck!
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