Latest Poll – Funding Adviser Oversight

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Do you agree that advisers should contribute to the cost of funding ASIC’s regulatory oversight of the financial advice sector, as long as the costs are equitable?
  • No (82%)
  • Yes (16%)
  • Not sure (2%)

Our latest poll seeks your view on whether advisers should self-fund the cost of the regulatory oversight of their activities – on the condition that the cost they’re required to pay is fair and equitable.

Over the last week, adviser associations have railed against ASIC’s 2020/21 cost recovery estimates for the financial advice sector, leaving ASIC and the Government in no doubt as to what the associations believe is a cost structure that is variously referred to as unfair, inequitable, unsustainable and unconscionable.

Even under this spotlight, however, the associations themselves concede their issue is with the structure of the funding requirements and who should be contributing, rather than with the principle of the user-pays system that underpins the funding:

Call For Banks to Share ASIC Funding Levy Costs

Adviser Associations Slam ASIC Funding Levy Increase

ASIC points out that as a regulator, its annual budget is set by the government of the day, and it is required to advise its master how it will recover the cost of its activities from each of the subsectors it regulates; financial advice being one of those subsectors.

As we’ve reported, the issue since ASIC’s release of its 2020/21 estimates has been one of fairness in respect to who should and should not be included in the cost recovery collection. But everyone seems to be on the same page when it comes to the principle of user-pays – as long as it’s fair.

Do you agree with this? Should you be required to stump-up your fair share for the cost of ASIC’s work in the financial advice sector? Or do you believe the cost of the regulator’s oversight activities in this sector should be funded from elsewhere?

Tell us what you think and we’ll report back next week…



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2 COMMENTS

  1. One persons interpretation is another persons claim of injustice.

    The question of paying for work done, as far back as when civilisations and commerce commenced, has always had the proviso, that the job must be done to a high standard in order to be entitled to full payment.

    The ASIC cost recovery funding mechanism has been flawed from day one.

    The obvious one is a large part of what the Government and ASIC has done over the years, has led us down a path that has had the exact opposite to their stated objective of more affordable and attainable advice.

    This has cost the Tax payers vast amounts of money and ASIC charge out rates are very high.

    There have been numerous mistakes from the Government and ASIC which has seen the costs blow out, which leads us back to the first point, which is; An entity should only be paid for work that has been done to the stated objectives and as the Financial Planning and Insurance Industry have been led down a maze of complexity that has led to the mess we are all in, then charging Advice practices anything is too much in the current environment.

  2. The regulatory cost should be spread across all product providers (who control the largest share of industry revenue) and advisers on a reasonable basis. All penalties levied should be retained by ASIC to fund regulatory action and any shortfall should be sourced from consoidated revenue as it is a social cost. Finally the ENORMOUS dividend (apparently a profit around $600million) paid bay ASIC to consolidated revenue must end. This is nothing more than UNDISCLOSED TAXATION not approved by the electorate.

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