The freezing of the ASIC levy at 2018-2019 levels of $1,142 per adviser for the next two years and the review of the ASIC funding model in that time is welcome news that the government recognises the rapidly rising levy is unsustainable, says Judith Fox, CEO of Stockbrokers and Financial Advisers Association (SAFAA).
ASIC’s recently released levy estimate of at least $1,500 plus $3,138 per financial adviser for FY 2020-21 is an increase of 179% from FY 2017-18 and is coupled with a sustained reduction in the number of financial advisers across which this cost can be recovered.
‘It appeared to our members that ASIC was funding action against large financial institutions that were the subject of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by charging those entities not called before the Commission,’ Ms Fox said. ‘No stockbroking or listed investment advice firms were called before the Royal Commission.’
SAFAA has consistently pointed out that the stockbroking and listed securities advice sector has an exemplary record as regards the handling of customer complaints. As reported in AFCA complaint statistics for the period 1 October 2019 to 30 September 2020, out of a total of 80,833 complaints received, only 0.6% were made against stockbrokers.
‘We had called for a review of the ASIC funding model to make it more granular and risk-based to more accurately reflect the firms that are generating the enforcement and supervisory work,’ Ms Fox stated. ‘We therefore welcome the government’s review of the ASIC funding model and its recognition that the financial advice sector is under significant pressure. Advice to Australians cannot be made more affordable if the costs of providing that advice increase unchecked.‘
SAFAA had joined with other associations in calling on the government to review the ASIC funding model and had written to ASIC Chairman, Mr Joseph Longo, calling for recognition of the limits of firms to sustain ever-increasing costs arising from the blizzard of regulatory reform.
‘Stockbrokers and investment advisers play a vital role in supporting the Australian economy through their support of businesses,’ said Ms Fox, ‘and retail investors benefit from participating in the success of Australian companies. This announcement is hopefully the start of genuine recognition of the value that stockbrokers and investment advisers provide.’
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The Stockbrokers and Financial Advisers Association (SAFAA) is the professional body for the stockbroking and financial advice industry. Our members are Market Participants and Advisory firms that provide securities and investment advice, execution services and equity capital-raising for Australian investors, both retail and wholesale, and for businesses. Practitioner Members are suitably qualified professionals who are employed in the securities and derivatives industry.