An adviser who wished to be unnamed told ifa he received reminders of potential penalties from the regulator last week, if he failed to pay the Industry Funding Levy payment for his licence.
The adviser paid the levy, which was close to $24,000. But for a practice employing around 10 advisers, he noted the payment is unfair for smaller businesses running a “tight ship to remain compliant”.
“Whilst I totally get the levy, in terms of user pays, it was undoubtedly imposed upon licensees post royal commission with the large AFSL holders in mind,” he said.
“That [payment] actually constitutes two months wages for my staff; right now, that is an extremely useful amount of money to have set aside for business continuance.
“For advisers under other licensees, I know the licensee passes on the levy cost to each adviser. That would be over $1,000 each, possibly a month’s grocery bill for the families of those individuals. If the federal government is serious about keeping businesses running, a refund of the levy would definitely make a huge difference to the financial services industry.”
ifa has received similar comments from readers around the same issue, saying the regulator is continuing to charge practices compliance fees despite the easing up on other supervisory measures.
In response, ASIC said the levy invoices were dispatched on 31 January, before the crisis kicked off in Australia.
A spokesperson for the regulator said: “Anyone who is experiencing difficulties paying their levy should contact ASIC so we can discuss options.
“If ASIC agrees to a payment plan we will not charge late payment penalties as long as the revised payment dates are met.
“Waivers will be considered on a case by case basis where exceptional circumstances are demonstrated. Late payment penalties will also be halted while a payment plan or waiver application is under consideration by ASIC.”
ASIC and APRA have both alleviated certain regulatory mechanisms recently, in light of the virus shaking up the financial markets.
The corporate regulator in particular has canned its new supervision measures including the Close and Continuous Monitoring program, which saw ASIC staff on-site assessing major financial institutions.
It remains to be seen what its future plans are around the levy and if it will change its requirements.
But while the regulator offered to change payment plans, the adviser who spoke to ifa said it should be returning the fees to small practices.
“In these extraordinary times, ASIC, whilst gearing down like everyone else, in my opinion, should be refunding the levy payment to all small licensees at the very least, to help them stay open and keep staff employed,” the adviser said.
Umm, what everyone here is forgetting is that ASIC hate IFA’s and their agenda is to destroy SME FP’s so they can be left with regulating the banks and issuing them $100 Million dollar penalties and class actions – DERRR! Also the levy’s increased by 5% this year, notwithstanding that the inflation rate was 3% so you are left wondering how they justify the extra 2%?
No, you couldn’t be more wrong, the increase was in excess of 20%. From $943 to $1141 per adviser.
The cost of advice is just ridiculous.
I have emailed my local member and Senator Hume. I suggest everyone does the same.
I’m baffled as to why advisers need to pay them a levy if ASIC’s salaries are already guaranteed by the taxpayer?
Hmm. according to some AFSLs, the notices were NOT RECEIVED until around 13 March. That buggers ASICs misleading response, inferring the fees have all been paid. COVID was well and truly under way by 13 March. And I hear ASIC were pressuring to paid by last Friday
Absolutely amazing how much money ASIC consumes on an annual basis – and they received $70M to look at the 4 Banks and AMP in the RC, plus the extra funding they received after the RC. Just how much money to they receive per person?
I am a sole trader, with limited AFSL, had to pay $2672.00 on time so that I don’t get hit with late payment fees. How unfair is this!!
It’s ironic ASIC are collecting fees and now providing no service! Shall we have a 10 year look back on them? Refund of fees? They’ll come out and say we aren’t refunding as we have fixed costs, but we are doing work behind the scenes that you don’t see….. Do they now get the gist of how Financial Planners have been treated?
Why are we (the people and our industry) still paying full wages to ASIC employees! They are not doing anything, and just about every employee and business is taking a large haircut on their incomes, yet the government nuffies are getting their full pay. Drop their working hours and drop their pay FFS.
I understood to hold a license you have to be able to meet your debts as and when they fall due in addition to forward cash flows showing solvency. Will be interesting to see how ASIC view this in coming months when most businesses would struggle to forecast cash flow with any certainty and many aren’t going to be able to pay their debts.
[i]A spokesperson for the regulator said: “Anyone who is experiencing difficulties paying their levy should contact ASIC so we can discuss options.[/i][i][/i]
That’s cold. Show’s just shows what heartless bastards they must be. Imagine how long you’d keep your license if you approached them and said I have difficulty. The sacrcasim and coldness of that comment is chilling. These levies are only going North given cash handouts.
Exactly. If an AFSL went to ASIC claiming financial difficulty they would leap on it as a reason to cancel the licence.
What the ASIC spokesperson actually meant was [i]Anyone who is experiencing difficulties paying their levy should sack their support staff, take a wage cut, and not buy any Xmas presents for their kids.[/i][i][/i]
1) Last year, the Adviser Levy was $934 per AR; this year, $1142 – an almost 20% increase. Government efficiency, or the never ending expansion of Government bloat?
BTW, why should it be “User Pays” for a [b]Regulatory service which benefits all participants, including millions of citizen investors, etc[/b][b][/b] in ensuring a stable, well structured, law abiding financial services “market” across the entire economy?
IMO. like the TPB, FARCEA, etc, this is merely a cash grab to offload regular Government costs from the Budget, to fund a much coveted “surplus”. Frydenberg and Morrison’s ruthless obliviousness to consequences over pursuing the low hanging political and ideological fruit of RC and Treasury stupidity is simply destroying an entire segment of the economy.
2) BTW, while we’re at it, how about deferring the unConstitutional theft of grandfathered client base income?
As our AFSL passed it on, I feel privileged to have paid $1,100 knowing that I am effectively paying 1 days wage for Mr Shipton. Between me and the other adviser in our small AFSL we will have him nearly covered for the month of March. C’mon all you whingers, put your hands in your pocket and help pay for the rest of the year for him.
ASIC should be required to provide FDS and Opt-Ins to Advisers for the fees they charge us each year. So far I’ve not seen any benefits, nor have my best interests been considered or provided for. In fact they do their best to ensure it’s almost impossible to meet the best interests of my clients also considering their best interests differ from ASIC’s definition
If ASIC is not going to be doing the work for which they have collected this levy, then using the “Fee for No Service” approach which has been used against advisers ASIC should have to refund the levy for not doing the work.
If it is good enough for advisers to be crucified even though most would have provided ongoing services to their clients, then the same principle needs to be applied to the regulator.
ASIC needs to come down out of its ivory tower and look at what we advisers are experiencing as we help our clients to make good decisions during very difficult times.
Of course, this is unlikely to happen as I haven’t seen any pink pigs fly last recently.
ASIC is a corrupt diseased dog that needs to be put down.
Our AFSL has to pay almost $400,000 at a time they are forced to do redundancies , how can the government sleep at night
The $400k affords them the very best in luxury hotels with super comfy beds…