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ASIC admits 27,011% advice cost difference

Mike Taylor21 December 2023
Man caught between divergent arrows

A recently released dashboard report on the Australian Securities and Investments Commission (ASIC) industry funding model has underscored why the regulator is facing questions about why it spends so much overseeing retail financial advice compared to wholesale advice.

The ASIC data covering 2022-23 confirms that when it comes to overseeing the financial advice sector, ASIC’s actual costs for the period came to $47.593 million for “licensees that provide personal advice to retail clients on relevant financial products”.

By comparison, it confirms that it spent just $176,000 overseeing “licensees that provide personal advice to wholesale clients only”.

ASIC has acknowledged the difference between retail and wholesale costs is “27,011%”.

As well, it shows that ASIC incurred actual costs of $2.253 million overseeing “licensees that provide general advice only” and a mere $96,000 on “licensees that provide personal advice to retail clients that are not relevant financial products”.

The amount being expended overseeing each sub-segment will raise questions with financial advisers about how much ASIC is likely to dedicate to the oversight of “qualified financial advisers” either inside or outside of superannuation funds.

ASIC has already faced questions on notice from the Senate Economics References Committee within which NSW Liberal Senator, Andrew Bragg, refered an earlier suggestion that ASIC had spent just $35,000 on wholesale financial advice providers in 2022-23.

He asked whether such a figure was likely representative of all the work that had been done on wholesale advice providers by ASIC.

ASIC has responded by pointing to the $176,000 figure claiming that it represented “ASIC’s regulatory effort for that subsector that year”.

“ASIC continues to monitor threats and harms, including emerging threats and harms, across various sectors throughout each year, adapting to any changes and reassessing our priorities if required. If ASIC identifies increased rates of misconduct towards wholesale clients, we will reassess our priorities and the focus of our regulatory efforts accordingly,” ASIC’s answer said.

“ASIC has in place a number of controls to reduce the likelihood of incorrect allocation of costs to sub-sectors. The controls include a thorough reconciliation process for time allocated across different sub-sectors, an assessment of case allocations to respective sub-sectors, a reconciliation of ASIC’s overall expenditure, a comprehensive analysis comparing budgeted costs to actual expenses across all sub-sectors and senior executive reviews of all key industry funding model inputs.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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6 months ago

If you compared it to how much time and resources ASIC spends on the primary sources of harmful financial advice… unlicensed accountants, real estate agents, union super sales people, and finfluencers, the differences would be even more stark.

ASIC’s primary focus in financial advice is persecution of licensed financial advisers, not protection of consumers.

one foot out the doora
6 months ago
Reply to  Anon

ASIC’s primary focus in financial advice is persecution of licensed financial advisers, not protection of consumers.

You nailed it!

Pro Industry fund unlisted property Ponzi schemes
6 months ago
Reply to  Anon

Wonder how their KPI’s are measured? or how they are paid on bonuses…. I bet this will correlate to the activity they are doing!

Bet their is no overall measure how they are going overall in protecting customers which is also measured in a balance approach to the other sectors they have to look after.

This is a government agency and we should see the data

Corrupt Canberra
6 months ago

ASIC = Arrogant, Secretive, Incompetent & Corrupt.
What a misguided, out of control bureaucratic bumbling bunch of fools.
Merry Christmas Real Retail Advisers, another year of persecution from ASIC

Davey NoFurries
6 months ago

Corruption at ASIC, there needs to be an RC into Treasury and ASIC’s operations. Just another reason why advisers need to fight back and put regulation into the hands of an Industry Self-Governing body.

Max Tuckwell
6 months ago

ASIC have for too long been an enforcement arm of the Labour ideology and industry super funds.
Do not expect this to reduce with the latest charade from Jones and ilk.
We’ll be footing the bill until we are driven out of business.
The term qualified “Qualified” advisors is an overt move to enforce this objective.
Why the term “para” advisor as per para legal or para medic wasn’t adopted indicates the intention of this Govt.

6 months ago

Well done Andrew Bragg. Keep pushing.

Andy Semple
6 months ago

What does ASIC actually oversee?

Anon E Mouse
6 months ago

It’s amazing what you can’t see when you don’t look.