Yes, financial advisers are proportionately paying more
Financial advisers and licensees frowning over the Australian Securities and Investments Commission’s (ASIC’s) announcement of an estimated 6% increase in its industry funding costs for 2024-25 can blame the regulator’s increased responsibilities.
The Cost Recovery Implementation Statement (CRIS) issued by ASIC accompanying its announcement reveals the additional burden being carried by licensees providing personal advice to retail clients on relevant financial products when compared to others in the advice sector.
The CRIS reveals it is these licensees who are picking up the bulk of the cost on the FSCP and the financial adviser exam along with once-off issues such as SMSF establishment advice compliance, and the monitoring of offshore outsourcing arrangements.
Indeed, broken down to cost, enforcement attributable to these licensees is estimated to have cost $17.18 million – representing nearly half of the total $39.271 million levy.
This then needs to be weighed against the costs attributable to “licensees that provide personal advice to retail clients on products that are not relevant financial products” where the overall levy is $43,940 and the cost of enforcement is just $1,000.
Equally, the estimated levy with respect to licensees providing general advice is just $5.234 million with enforcement making up half of that amount at $2.764 million.
The ASIC CRIS breakdown also confirms why providing personal advice to wholesale clients is so attractive to some licensees, with the total levy for the sub-sector estimated at just $1.642 million with enforcement costs amounting to just $847,000.
Where the superannuation sector is concerned the estimated cost recovery amount is $26.621 million with superannuation fund trustees facing $26.62 million and a minimum levy of $18,000 plus $10.37 per $1 million of assets above the $250 million threshold.
Where enforcement is concerned, ASIC has estimated the cost at $7.798 million for superannuation fund trustees.
ASIC retail Adviser persecution continues.
Get stuffed ASIC & Govt.
How exactly is this model benefiting consumers?
ASIC is primarily focused on persecuting innocent, professional, advisers, and charges them for the privilege. This makes it much harder for consumers to access affordable professional advice, so they turn to dodgy unregulated sources instead.
Finfluencers, scammers, real estate spruikers, and SMSF spruikers (aka accountants) are all thriving thanks to ASIC.
Remind me again, when ASIC wins in court and extracts fines – where does this money go again?
Insanely unfair system we have in Australia.
We need a Royal Commission into ASIC. ASIC are failing as a regulator. They’re adversial when it comes to Advice. The market is not efficent and the hundreds of Australians being scammed are the result.
If you as a Professional Adviser contacted ASIC today about a scam or poor advice they’d literally yawn at you.
The greatest fee for no service rip-off is conducted by ASIC.