The 5 areas against which ASIC bills advisers for investigating
The Australian Securities and Investments Commission (ASIC) has detailed the investigations against which it allocates costs to financial advisers.
As financial advisers worry about the size of their ASIC levy bills, the regulator has revealed to Senate Estimates the types of investigations it believes advisers should be billed for.
- Appropriateness of advice (includes best interest failures, conflicts, and unlicensed conduct)
- Dishonesty (including scams, fraud, and fees for no service)
- Licensee obligations including governance, resourcing, competency (includes directors’ conduct, and any failure to lodge or AFCA expulsions etc.)
- Relevant Providers (Financial Adviser Exam, Fit and Proper persons)
- Advice in relation to High Risk Property schemes and/or which causes erosion to super.
Answering questions on notice from West Australian Liberal Senator and former ministerial adviser, Slade Brockman, the regulator also claimed it was justified in maintaining its scrutiny of financial advisers.
Notwithstanding the latest Australian Financial Complaints Authority (AFCA) data which showed advisers were nowhere near the top of the list for complaints, ASIC said it “continues to see a significant number of reports of misconduct in relation to the financial adviser subsector.
“Financial advice matters continue to represent a significant proportion of ASIC’s enforcement activities.
“ASIC considers that this is in part due to:
- Heightened community and industry awareness of misconduct, in particular financial advice misconduct, following the Financial Services Royal Commission (FSRC);
- ASIC’s supervisory and enforcement approach following the FSRC; and
- The level of enforcement effort required in respect of unlicenced operators involved in providing financial advice.”
“For financial year 2023-24, ASIC estimated that enforcement had allocated costs to 79 different formal investigations related to financial advice. The breakdown of costs relating to these investigations equates approximately to 76% of Enforcement & Compliance with a further approximately 19% of costs referrable to compliance, pre-investigation/surveillance activities and administer the Financial Services Credit Panel. The remaining 5% is linked to central management and support,” ASIC’s answer to Brockman said.
So properly licenced financial advisers are being billed for ‘unlicensed conduct, scams, fraud and High Risk Property schemes’!!! This is blatant corruption. ASIC has no shame.
over to the AFSLs, FAAA, AIOFP (who do a good job), to tidy this up. why would we be charged for property when we dont even have a licence, that should fall squarely on the real estate institute. morons !
AFSL’s won’t care. We are paying their fees too
I think we should fine all honest drivers for speeding and parking infringements because they might do it. We should fine everyone as they might take illicit drugs and we need to fund the police.
Oh that’s right we do. It’s called tax. We tax the population for the public good and to weed out what society decides is unacceptable behaviour. We don’t even fine convicted criminals for the cost of gaols FFS.
But honest advisers need to be penalised. This is the same fining short ppl for being short. It’s ridiculous and unfair. Oh and guess what? It makes advice more expensive and less accessible.
ASIC out now. Professional standards board in.
Good points Wildcat.
This approach is still charging the many compliant advisers for the actions of the few non-compliant. The penalties charged against miscreants, advisers and/or product providers, should be the source of funding and the compliant adviser fee nominal.
The AFCA data shows advice is a tiny, tiny part of the problem in financial services.
ASIC’s justification for the insane, outsized focus on advice amounts to:
Breathtaking in its ignorance. I’ve often looked through the AFCA database to find how many advice matters are there and found so little I wondered if I was filtering incorrectly but it seems I was right. Advice and advisers are a barely significant component yet we face the majority of the oversight and penalites. Somebody please make it make sense.
Meanwhile, Scammers continue to open ASIC registered Companies daily, and Billions of Australians monies are lost.
Let’s remember that ASIC consider all Advisers, especially YOU, to be thieves that steal money from clients funds according to ASIC heads.
It’s like the Police Officer that pulls you over. If they want to find something wrong he/she will. Very Similar in the way ASIC reviewed Fee Disclosure Statements and found spelling mistakes and said they were defective. Or went chasing Advisers when they promised to deliver clients 2 reviews & 4 newsletters but they only delivered 2 reviews and 3 newsletters so it was considered fees for no service and also defective FDS.
Or a few years ago when the annual review was due by Monday but the meeting was on Friday, a classic example of the breach of the legislation and fees for no service. Thieves.
Let’s remember that this is the body that writes a FASEA exam designed to trick, mislead, and deceive rather than a traditional exam to test knowledge & cull out Advisers…and then re-writes it after for new entrants, in an attempt to cover their tracks when the Suicide rate goes up and family members start asking questions.
I spent decades writing exams at University level and testing peoples knowledge. I passed FASEA first time but I feel quite strongly that was an elimination exercise that led to suicides and ASIC got away with it.
The combination of prohibiting Advisers from discussing the exam and FPA Directors working as paid consults for ASIC and you’ve got the perfect crime.
ASIC are bastards…they’re doing it again, and need to go.
Can someone please provide me with a logical reason why a licensed adviser is being charged for ASIC to investigate unlicensed advice? High risk property schemes are also outside licensed advice. I need a drink and then another visit to my psychologist after reading this reply from ASIC. No one could be this dumb on accident, I don’t like seeing a conspiracy but it is impossible to be as incompetent as ASIC without them having an agenda.