FPA bites back on ASIC ‘fee gouging’

The regulator’s cost implementation recovery statement, released on Friday, revealed that ASIC would seek to recover $40 million from licensees providing personal advice to retail clients in the 2019-20 financial year.

This amounted to a flat fee of $1,500 per licensee, and $1,571 per additional adviser under the AFSL, ASIC said.

FPA chief executive Dante De Gori said following a 22 per cent increase in levy costs for licensees two years ago, a further 38 per cent rise was unreasonable and not helpful to advisers already struggling to service clients amid rising regulatory costs.

“No matter which way you look at this, it is excessive at a time when financial planning professionals are working hard to help their clients through extraordinary circumstances,” Mr De Gori said.

“Financial planners themselves are already under tremendous pressure to meet new education requirements, await critical outcomes on the FASEA extension from an unpredictable Parliament and overhaul their business models to meet regulatory requirements.

“As small businesses, financial planning practices also face the challenges that COVID-19 has created for the wider SME sector. ASIC’s fee hike does nothing to support them or their clients during this difficult time.”

For licensees that provided general advice only, ASIC would seek to recoup $829,000, at a cost of $813 per licensee. For those providing wholesale advice only, the regulator would recover $245,000, or $155 per licensee.

For insurance product providers, including AFSLs with a licence to deal in life insurance products, ASIC’s levies amounted to $14.4 million.

This amounted to a levy of $20,000 plus $2.78 per $10,000 of revenue over $5 million, according to the statement.

In addition, ASIC would recover $5.85 million of supervisory costs from “entities subject to close and continuous monitoring”, or deposit taking institutions with over $100 billion in deposits or more than 1,000 authorised representatives.

This would amount to a levy of $1.17 million per entity, ASIC said.

ASIC would also recover $1.6 million in costs to regulate MDA providers for the financial year.