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Cut ASIC enforcement costs out of the levy says adviser

Mike Taylor5 October 2023
Inspector Clouseau character

Financial advisers should not have to pay the cost of Australian Securities and Investments Commission (ASIC) prosecutions, a Parliamentary Committee has been told.

Self-licensed adviser, Peter Alvarez appeared before the Senate Economics References Committee to make clear that he had no objection to paying a levy to fund ASIC, but he did not believe that that levy should be used to fund ASIC prosecutions.

He said he believed ASIC enforcement action should be cut from the industry funding model.

Answering questions from the Committee deputy chair, Australian Labor Party Senator, Jess Walsh, Alvarez also said there needed to be more transparency from ASIC about how levy money was being spent.

Walsh said that the committee had heard that action needed to be taken against unscrupulous players, both licensed and unlicensed, “and it is pretty clear that people would like ASIC to take more action”.

“Do you see this enforcement work in the sector as being necessary, do you see it as effective?” Walsh asked. “Obviously investors need protection but we need to uphold the standards for reputable as well. What improvements need to be made there to protect reputable advisers and of course investors?”

Alvarez said he had not seen a lot of ASIC but what he had seen was numerous examples of cases dragging on for years to prosecute bad apples.

“What takes so long is because the legislation is too convoluted and in too many cases the money is already gone,” he said suggesting that if the money was not being recovered then the costs were being passed on to the industry.

“If you’re dealing with old, convoluted legislation the time to prosecute means you are collecting less of the money,” Alvarez said.

Walsh said the committee had heard evidence it was costly to go after unlicensed advisers and that the cost is part of the levy paid by licensed advisers.

She noted that the review of the industry funding mechanism had recommended the cost of enforcement of unlicensed operators should be spread across a broader population than the licensed operators or spread over time.

However, Alvarez responded that enforcement should be cut out from industry funding model.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Share prosecution $$$
5 months ago

ASIC promised the Adviser Levy would be reduced by Prosecution Wins $$.
Well ASIC pay up Advisers our share of the Wins $$$$.
ASIC / Govt currently have Advisers as Legal Funders yet Advisers have not received a single cent of the Prosecution wins $$$$.

Anon E Mouse
5 months ago

It is grossly unethical for ASIC to charge a fee on the innocent for the prosecution of (as the courts have found) the innocent.