The Financial Planning Association (FPA) is continuing to prioritise the Australian Securities and Investments Commission (ASIC) levy and the scope of the compensation scheme of last resort (CSLR) as they are “two issues of particular importance” for the advice sector.
As part of a submission ahead of the October budget, the FPA returned to a point raised in its pre-budget submission ahead of the May budget, where it recommended the ASIC adviser levy should remain frozen until the conclusion of Treasury’s review of the industry funding model.
In its latest submission, the industry body highlighted its concern regarding the release of the review findings prior to the expiration of the levy freeze. Many in the financial sector would be unable to absorb any increases in fees, it noted.
“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,” it said.
“Many practitioners are sole traders or work in small and medium-sized practices and their ability to absorb any additional regulatory costs is extremely limited.
“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 FPA also recommended the design and implementation of the CSLR be expanded beyond its current focus on credit intermediation, securities dealing, credit provision, insurance product distribution and personal advice on relevant financial products to retail clients.
“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,” it said.
“This 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.”
It also repeated its call for financial advice at any stage of the advice process to be made tax deductible, thereby improving the accessibility of advice for consumers.