Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
FPA seeks urgent extension of ASIC levy freeze
The Financial Planning Association (FPA) has urgently called for ASIC to extend its freeze on the annual industry levy to cover the 2023 financial year.
In a statement issued on Tuesday (23 August), the FPA outlined the potential for big increases in the ASIC fees paid by financial planners for the 2022-23 financial year.
The FPA believes the fee freeze is about to end.
The call comes from the FPA to provide financial planners with some cost certainty for the current income year. The industry body has expressed its concerns practitioners could face a significant rise in their operating costs seeing the levy currently stands at $1,142 per adviser and has not been increased since the 2019 income year.
According to the FPA, time is running out for any changes to the model to be agreed and then implemented in time to impact the current financial year.
“Making financial advice more affordable for all Australians starts with making financial planning more affordable to practice,” FPA chief executive officer Sarah Abood (pictured) said.
“There are activities that we’re aware ASIC undertakes that have nothing to do with financial planners yet are funded by financial planners in the current model. The government has had to intervene twice in the past five years because the model isn’t working as intended.
“It is important that any year-on-year increases better reflect the capacity of the financial planning profession.”
Abood highlights an FPA submission recommending charging the six large licensees at the time (AMP, Macquarie, ANZ, CBA, NAB and Westpac) directly under a separate and specific levy for the cost of ongoing oversight of their remediation programs and litigation.
“Consideration should be given to excluding these costs from the levy where these matters are ongoing, until the litigation proceedings are complete and the matter has been determined by the court,” she said.
“This will make it clear whether ASIC has achieved a successful outcome in relation to the litigation, and therefore whether costs will or will not be recovered from the entity subject to litigation investigation and proceedings.
