The FPA has urged ASIC to reconsider a 38 percent increase to its industry funding levy for financial advisers as the nation enters its first recession in 29 years.
A statement from the FPA says that the corporate regulator has released, for consultation, its Cost Recovery Implementation Statement 2019-20 (CRIS), which has been prepared based on its planned regulatory work and budgeted allocation of costs at the beginning of the 2019–20 year.
The FPA says that ASIC estimates that the industry funding levy for 2019-20 will be $1,571 per adviser, a 38 percent increase on the previous year.
It notes that the corporate watchdog is looking to recoup $40.17 million from 3,051 AFS licensees with 22,652 advisers.
While ASIC states that the indicative levies for 2019–20 are an estimate, the FPA believes a 38 percent cost increase per adviser is excessive and last financial year the final levy amount was even higher than the estimate, the statement says.
Dante De Gori, CEO of the FPA, described the increased levy as “fee gouging” and says it is an unreasonable demand on financial advisers given the current economic environment.
“Financial planners were hit with a 22 percent increase in 2017-18. Now ASIC estimates the levy will increase by 38 percent for 2019-20. No matter which way you look at this, it is excessive at a time when financial planning professionals are working hard to help their clients through extraordinary circumstances,” he says.
He says that advisers are already under tremendous pressure:
- To meet new education requirements
- Await critical outcomes on the FASEA extension from “…an unpredictable Parliament”
- Overhaul their business models to meet regulatory requirements.
And adds that as small businesses, advice practices also face the challenges that Covid-19 has created for the wider SME sector.
“ASIC’s fee hike does nothing to support them or their clients during this difficult time.”
Measures to make advice more accessible to be removed
The FPA statement says that ASIC also announced that measures designed to make financial advice more accessible to Australians during the Covid-19 pandemic will be removed.
It says that ASIC has set an end date of 15 October for the Covid-19 relief measures including:
- Relief to facilitate advice to individuals financially affected by Covid-19 about early access to superannuation
- Relief extending the period for giving time-critical Statements of Advice
- Relief to allow a Record of Advice to be given instead of a Statement of Advice in certain circumstances
De Gori says the industry was not consulted on the decision.
“These relief measures have made advice more affordable for Australians when they need it most by reducing costs among financial planning practices,” he says.
The statement notes that ASIC had asked the FPA to canvas its members on their use of these relief measures and that it is still in the process of compiling this feedback.
“It is too early to understand how long these measures will be needed and far too soon to be setting an end date, given that the feedback process is yet to be completed,” De Gori says.
ALL ADVISER BOYCOTT ASIC PAYMENT.
These megalomaniacs ever increasing fees and commitment to KILL advisers MUST stop. Let them ban all advisers by not paying and see how that works for them.
totally agree, I dont know why we even need to pay this. They dont do anything but stuff my business up. The main question I have for the FPA and AFA, what are you doing out there? Nothing its seems….. You get paid a lot of money to not support our industry so maybe its time to start hey? LIF changes where meant to make premiums cheaper for my client, guess what Asteron are increasing IP by 16.9% on an already inflated premium…. what I want to know is where it is fair to decrease my commission to 66% but increase the premiums by 16.9% year on year…… I can see that they now have at least 50% more profit to be able to reduce my clients premium…. I think we need a royal commission into industry associations as well as Public service (government employees) High pay for doing absolutely nothing….. talk about ruining an industry…. dont tell me to go speak to my MP he is useless just like the associations.
This is out of control. We pay taxes for these muppets to do their job. ASIC appears to be on target to destroy our industry, who is pulling their strings? Over 50% increase in two years is plain theft.
It is like a never ending merry go-round of decisions that are destroying the Retail Life Insurance Industry for NIL benefit for Australia.
It is one thing after another, with no relief and the one simple extension for advisers to get half a break while trying to help clients through these unprecedented times, is thwarted twice by self-interest lobbying in Canberra.
ASIC are too far removed from what is happening in the real world, to understand and even if they do have an inkling, they do not care.
There must be a point where enough is enough and as an Industry, a line is drawn in the sand and the Government is told NO.
Comments are closed.