The FAAA has pinpointed three main ways it believes that ASIC could better achieve its goals, including more transparency around the ASIC levy for financial advisers.
In a statement to the Senate Economics References Committee about ASIC’s performance CEO Sarah Abood highlighted:
- A call for more transparency around ASIC’s levy for financial advisers
- ASIC could better leverage and more transparently report intelligence from the financial adviser population
- ASIC should more tightly focus and prioritise its activities to areas that pose the highest risk of consumer harm
Abood told the committee the association believes there are three main ways that ASIC could better achieve its goals “…of a fair, efficient and transparent financial system in which consumers can confidently participate.”
One suggestion was around transparency, noting that ASIC is industry funded on a user-pays model “…and it apparently spent $55.5m on oversight of financial advisers in the last financial year.”
She says this is more than it spent on any other sector including listed companies, super funds, insurers, and the wholesale sector. As a result the ASIC Levy for financial advisers “…has almost tripled since an earlier freeze, to over $3,200 per adviser.”
…we have no visibility of how ASIC attributes its enforcement costs, and very little information is provided to the regulated population on how its money is being spent…
The association thinks its members “…may be paying for expenditure that should not be attributed to them. However we have no visibility of how ASIC attributes its enforcement costs, and very little information is provided to the regulated population on how its money is being spent.”
Abood says more transparency would allow for any errors to be picked up “…ensuring costs are being shared fairly, improving confidence in the system.”
Intelligence from Financial Advisers
Another suggestion was that ASIC could better leverage and more transparently report intelligence from the financial adviser population.
“Our members are proud to be considered and trusted as professionals, and are well-placed and highly motivated to identify and stop problems in our sector early.”
She says they often ask the association to pass on information about misconduct to ASIC.
“However, in most cases no further information is provided or requested by ASIC and we are unaware of whether any action has been taken.”
…this is disheartening for those who have taken time and trouble, and sometimes risk, to report misbehaviour…
She adds this is “…disheartening for those who have taken time and trouble, and sometimes risk, to report misbehaviour and it lessens the chance that future reports will be made.”
Another suggestion was that with limited resources, ASIC should “…more tightly focus and prioritise its activities to areas that pose the highest risk of consumer harm.”
Abood says that since the breach reporting regime was overhauled in October 2021, licensees are now required to report much less serious matters to ASIC than previously.
“Breach reports have now tripled, and we are concerned that this has resulted in ASIC being overloaded with reports of minor administrative and technical breaches,” she notes.
