Two adviser associations have given their support to an industry based ASIC funding model but have recommended changes which would reduce costs for advisers who do not breach financial services laws.
Both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) have given their support for the proposed funding model but have stated in submissions to Treasury that financial advisers should pay less if they are compliant with the law and due to the burden of other costs currently laid upon advisers.
The AFA stated it supported the ASIC fund model proposed by Treasury “…provided the model is reflective of where the costs are expended at the adviser level and the model is not assessed in a vacuum that ignores other cost inflows to advice practices”.
The FPA also stated it would support the model but suggested it should be risk-based despite this requiring more input from industry and ASIC.
“…the levy system should reflect where the costs are being expended with a behaviour-based system to reward good behaviour…”
“Transitioning to a risk-based user-pays model, in whole or in part, would create a system where the cost of regulation is borne in an equitable, risk-based manner across the entire financial services sector as regulated entities would be required to pay according to their size and the complexity involved in regulating them,” the FPA stated.
The FPA stated the current proposed model is based on the number of advisers per licensee but that did not take into account that similar numbers of advisers between licensees did not create similar levels of risk and the latter should be measured in considering costs to advisers and licensees.
The FPA stated this measure would encourage business to reduce risks and adopt appropriate behaviour with the AFA stating that advisers and licensees who act in this manner should be recognised and awarded for good compliance.
“The AFA considers that if cost recovery is the primary aim of the model, the levy system should reflect where the costs are being expended with a behaviour-based system to reward good behaviour (with discounts on annual levies rather than penalise poor behaviour with loadings),” the AFA stated in its submission.
The AFA also called for a reduction in adviser levy costs where a practice or licensee was involved in the development of new and junior advisers while the FPA added that advisers in regional areas should not pay the full levy due to typically lower income levels of those in regional and rural areas.
Did I miss something? The AFA has given its support to proposed funding models for ASIC. I don’t recall being asked for my views on this proposal (as a member of the AFA).
‘The Australian Securities & Investments Commission (ASIC) is an independent Australian government body that acts as Australia’s corporate regulator. ASIC’s role is to enforce and regulate company and financial services laws to protect Australian consumers, investors and creditors.’
Why are Financial Advisers being forced to financially support a government body? Am I the only person who is angry about this? Why is the AFA so ****** eager to support this rubbish?
First we are forced to accept Government interference on how and what we can charge for our professional services (is there any other industry in Australia where this allowed to occur?) and now it appears we will be forced to financially prop up the government body that oversees our industry.
It’s akin to being forced to buy tickets to the Policeman’s Ball whilst receiving an infringement notice!!!!
Rant over (for the moment anyway).
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