FPA adds ASIC levy, CSLR to its list of pre-budget demands

In its pre-budget submission, the Financial Planning Association of Australia (FPA) has called on the government to broaden its proposed Compensation Scheme of Last Resort (CSLR), to extend the freeze on the ASIC levy for another year, and to grant financial advice tax-deductible status.

The FPA argued that the current CSLR Bill, tabled in September, is “too narrow” in scope, “provides inadequate coverage to consumers”, and fails to address some of the “underlying cause of unpaid determinations” such as professional indemnity insurance.

“We believe the government should amend the proposed legislation to establish the scheme so that its design reflects a broader base that includes all participants in the financial services industry,” the FPA said in its submission.

This, it opined, could be achieved by “broadening the scope of the scheme to include the entirety of the jurisdiction of the Australian Financial Complaints Authority”.

“Such amendments would ensure equity for industry and consumers as well as long-term sustainability for the scheme.”

In August, the FPA called for the “urgent and immediate” continuation of the ASIC industry levy freeze and a fairer approach to costs.

Reiterating these calls in its latest budget submission, the FPA argued that the ASIC industry should be frozen for a further 12 months to ensure cost certainty for the sector during FY 2022–23, while Treasury reviews ASIC’s Industry Funding Model.

“The current freeze has recognised the negative impact that ongoing significant ASIC industry fee increases have had on the financial services sector. We acknowledge and appreciate the government’s role to date in trying to control these spiralling increases for this sector,” the FPA said.

“To provide certainty to the profession and provide adequate notice of any change — which may require planning for business models to adapt — the review should be completed prior to the expiration of the ASIC levy freeze,” the group argued.

Moreover, the FPA said the freeze for financial planners should be extended to all industry sector participants who have been adversely affected by inexplicably significant ASIC levy fee increases.

The group is also seeking for the Australian Taxation Office and Centrelink to improve their online access arrangements to ensure financial planners are able to act on behalf of their clients.