FAAA calls on government to re-enact levy freeze
FAAA chief executive, Sarah Abood, has hit out at the latest ASIC levy estimate for advisers and called for the temporary freeze to be re-enacted.
Earlier this week, Minister for Financial Services, Stephen Jones, announced the final report of ASIC’s industry funding model, which included the news that the temporary levy freeze for personal financial advisers would end.
A temporary levy relief was provided to personal financial advice licensees for 2020–21 and 2021–22 in recognition of the higher levies incurred by this sector. This saw the per- adviser levy component capped at the 2018–19 level of $1,142 and the cost of this relief was borne by the government and not recovered through levies charged to other sectors.
On 28 June, it was announced that the 2022–23 levy for advisers will be $1,500 plus $3,217 per adviser, up from $1,142 per adviser last year.
Abood said the FAAA is “extremely concerned” by the tripling of the levy and the impact it will have on businesses.
“The levy freeze for the past two financial years was achieved as a result of strong advocacy on the need for fairness and equity in the way the levy is calculated. This resulted in substantial savings for the financial advice profession in the 2020/21 and 2021/22 years.
“We are extremely concerned to see the impact of the end of the freeze on the ASIC levy resulting in an almost tripling of the per-adviser cost.”
She is calling for the temporary freeze to be brought back in light of the flaw in the calculation of the levy amount and the smaller number of participants in the industry. The increase this year will end up being borne by consumers, she said.
“When the levy was originally frozen, at $1,142 per adviser, the profession had substantially more participants than it does now. The increase for this financial year, to an estimated $3,217 per adviser, almost triples the costs. Advisers will be forced to pass the cost increase on to consumers at a time when we are all working hard to make financial advice more affordable.
“We call upon the government to urgently reconsider the removal of the freeze in light of the flaws in the model being used to calculate the levy, and the negative impact on Australian consumers who will ultimately bear the costs.”
AUTHOR
Laura Dew
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Interesting, again the FAAA advocates after the fact. When are they going to get a head of the decisions and have some influence.
FPA / FAAA will never have much influence until they become a genuine professional association. While they remain heavily influenced by product providers, and give so called "professional designations" to people without a professional level of education, they will be treated as a joke.
The most important thing FAAA needs to do to get ahead of decisions is to reform their own organisation so they are taken seriously by others.
So, they want affordable advice & increase a fee at 413%.......
So much for affordable advice. The cost will have to passed onto the consumer. Seems no end to hurdles for advisers. Needs for the FAAA to advise the minister that advisers have at least 100 to 200 clients each that will be affected by this decision. Multiply that out.
Triple the theft tax to fund a corrupt, inept bureaucracy. Thanks taxation loving Labor.
Good on you Sarah...dont take no for an answer. Firstly, policy halves the number of Advisers the levy is spread among ( which is thier doing) then we are expected to pay for others doing. Its about time we stood up and took control of our profession..its time we stood up for ourselves... if ASIC wants to regulate and control us, does not allow us to self -regulate...they should take the hit...we are now mature enough as a profession to take some of the regulatory burden upon ourselves. We just need our members to stop sitting back, taking everything thrown at us and whinge about it...we need to band together, show a strong determined unified resolve.
Surely you pay your fees to your professional body to advocate in the halls of parliament for you. There is no point supporting a professional body who advocate when it's a fait accompli. I write to my federal member and raise all issues but it is the job of the professional body to sit at the same table before the decisions are made.
Let's see if this new formed association can actually have any positive influence on the government... I'll wait....
P.S. why are comments never shown on any of Laura Dew's articles?!?!
FAAA's "freeze" demand is much too little, much too late.
FPA should have been aggressively lobbying for the last 5 years to remove ASIC "cost recovery" altogether. Consumer protection should be funded by consumer taxes and fines levied against wrongdoers.
Although ASIC cost recovery fees are ultimately passed on to consumers, it is only to that tiny cohort of consumers who use licensed providers. Most financial advice, and most consumer harm, comes from unlicensed providers who don't pay any sort of regulatory fees. All consumers deserve protection, and all consumers should be funding it.
Treasury argues that licensed providers should pay the costs, because they're the ones who ultimately benefit from greater regulation. But that is baloney. ASIC actively persecutes licensed providers, and dissuades consumers from using them. ASIC largely ignores the harmful behaviour of unlicensed providers, and ultimately encourages more consumers and more advisers down that path.
When are you going to realise the Labor Party will continue their war against Financial Planners and SMSFs. They will do everything they can to wipe both off the face of the earth. They want Industry Fund domination. That’s because Industry Funds provide them with an unlimited source of money, control and power.
Andrew Bragg calls Stephen Jones the Minister for Industry Funds. Not unfair. Rescuing the underperforming industry funds rather gave the game away. People trust pre-election promises at their peril.
Well let's see is Sarah Abood can grow up to become like the savage Nancy Pelosi because that is what we need. and may Anderson and other AFA/FPA and other go back to being Santo Claus or clowns as they choose.
That is a valid point. The increase in the levy was partly due to the need to recover costs from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Royal Commission found that many financial advisers had engaged in misconduct, and the levy was seen as a way to recover the costs of investigating and prosecuting these cases.
Shouldn't the offenders pay the levy?
The number of advisers who engaged in misconduct was relatively small. The majority of advisers are professionals who provide high-quality advice. These remaining advisers would require far less monitoring, and the levy should be reduced , or better still, removed.
EVERY member needs to write to their local federal member and Senators for an explanation of the Levy and CSLR.
Given the amount of money governments are currently throwing at the land development and building industry, with an increasing number of builders liquidating with clients money it is also worth a question when a similar levy is being introduced across other areas including the building industry.
Steeper fines for those that do wrong to cover the cost of policing the dodgy advisors … pretty simple.
If the best the FAAA can do is be Extremely Concerned, I think I will cancel my Membership. I still think they have their heads in the clouds and don't understand what's going on in Public Practice World!
That FAAA response is like being smacked in the face by a feather...Sounds like we're taking a line out of former FPA staffer, Mr Marshan and the standard response text book on these issues...."let's not over react, let's see what's happens"...then they end up working for them.
Just ran the increase through BARD -
"The 411% fee increase was announced in ASIC's 2022-23 budget submission. ASIC said that the increase was necessary to cover the costs of its growing workload, which includes the need to investigate more complex financial products and services."
So there you have it, the increase is to investigate more complex financial products. They're the ones that should be paying the levy, not us plain vanilla advisers.
Jones made so many promises to adviser before the election. Industry bodies such as the AIOFP backed Jones and not only encouraged members to vote labor but also to encourage their client's to do the same. Now he is in power he has absolutely turned on advisers. He was a lawyer for Industry funds, his goal is to put all advice in the hands of industry funds.
Wouldn't parliment be more fun if the old saying "Liar liar pants on fire!" wss true
16,155 advisers at $3,127 a pop... Over $50,000,000. Do I get a free holiday with that? Oh no no no, someone else does. You're not part of our club.