Planner concern at higher regulatory costs


The Australian Securities and Investments Commission (ASIC) has taken both a funding and staffing cut from the Federal Budget, prompting the major financial planning organisations to express concern about flow-through cost impacts to planners.
According to the Budget papers, not only will the financial services regulator need to accommodate $120.1 million in savings over five years, it will also be reducing its staffing levels by around 200.
The changes prompted Financial Planning Association (FPA) general manager, policy and conduct, Dante De Gori to express concern at the broader industry impacts of the funding cuts to the regulator.
"The FPA will be paying close attention to the funding cuts earmarked for the regulator. In particular we will be keeping a watch on the impact to the funding in respect to any adverse effect in terms of licensing costs, and the like, for financial planners," De Gori said.
"We will also seek to ensure no impact on the regulator's services and capacity to monitor and supervise the industry."
The Budget papers show that while ASIC's average staffing levels last financial year stood at 1,782, this had been reduced to 1,573 for 2014/15.
At the same time, ASIC's registry business has been ear-marked for sale by the Government.
With ASIC having signaled to the Financial Systems Inquiry that it believes it should move towards a user-pays model, the Budget papers said the savings from the measure would be redirected towards repairing the Budget and towards funding policy priorities.
While ASIC has taken a cut to its funding, the Government moved to increase funding to the Australian Competition and Consumer Commission (ACCC), while the Australian Prudential Regulation Authority (APRA) has been forecast to virtually retain current staffing levels.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.