Bragg recognises advisers’ pain ahead of ASIC report

The long-running Senate economics references committee inquiry into the Australian Securities and Investments Commission’s (ASIC) investigation and enforcement is coming to a close as the committee prepares to hand down its final report.

While the report was previously due to be delivered on 27 June, committee chair senator Andrew Bragg took to LinkedIn on Tuesday evening to give a preview of what advisers can expect to see in the report when it lands on Wednesday, 3 July.

“As chair of the Senate economics committee, I understand financial advisers are under huge pressure,” Bragg said.

“Next week, I will be addressing some of the pain points with ASIC levies in the final report of the Senate economics committee inquiry into ASIC investigation and enforcement.

“I know financial advisers have been ignored by the Labor government on three key areas: ASIC levies, compensation scheme levies/Dixon scandal, unworkable drafting on restricting members from using their super to pay advice fees.”

The senator added that advisers “should be worried” about the upcoming CSLR levy, which he acknowledged had been “blown out massively” on the back of complaints related to Dixon Advisory.

“The claimed Dixon losses are estimated to be $458 million according to AFCA, who have received 2,500 Dixon complaints as of June 2024,” Bragg said.

“This is an increase of 500 since February. It’s been reported that the cost to the advice profession through CSLR levies as a result of Dixon Advisory could be above $100 million.

“What’s happening here is wrong. I’ve been asking the question of why proper law enforcement hasn’t happened here, and why small businesses are carrying the can.”

Pointing to his previous canvassing of the issues surrounding Dixon throughout the inquiry, he specifically noted the “callous and cold” responses from the Labor government.

Namely, in questioning whether the government felt that ASIC had done enough in relation to Dixon during Senate estimates, Finance Minister Katy Gallagher said: “I think that question is best placed to ASIC.”

On Tuesday, Bragg said: “It is clear to me that Labor doesn’t care about the impact of these levies on small and medium financial adviser practices.

“One of the most troubling parts of the ASIC inquiry has been the lack of action against the individual advisers who created this problem. ASIC has failed to do its job and the government won’t lift a finger.

“[At] Senate estimates, ASIC couldn’t tell me which commissioner signed off on the decision to agree to a measly $7.2 million fine against Dixon, and the decision not to pursue the individual advisers who created the Dixon mess.”

The senator said that the committee’s report will address “some of these matters”, before thanking advisers for reaching out to his office to express their concerns.

“I understand them and we are working on it.”

ASIC provided a last-minute supplementary submission to the committee denying obfuscation, an allegation Bragg had first levelled at the regulator in July last year.

ASIC has adamantly denied these allegations, reiterating in its latest submission that some questions posed by the inquiry pertained to “confidential investigations” and that, to “minimise harm to individuals”, the regulator had to invoke public interest immunity.

“This is a common position for law enforcement agencies and consistent with the approach taken by regulators in other oversight committees,” the regulator said.

“ASIC has not made these claims or raised objections with the intent to obfuscate or undermine the inquiry.”

Earlier this month, Bragg’s questioning of ASIC’s function bled into the Senate economics legislation committee’s inquiry into the first Delivering Better Financial Outcomes (DBFO) bill, expressing surprise and concern at the level of involvement that the corporate regulator had in the process of drafting the bill.

“I wonder whether they’d be better at more enforcement if they weren’t spending time talking about how new laws might be created,” he said.