The Financial Advice Association Australia (FAAA) has flagged concerns over rising regulatory costs in a pre-budget submission. 

It says the Australian Securities and Investments Commission (ASIC) levy almost tripled to $2818 per adviser last financial year, with the financial advice sector charged $47.6 million, more than any other sector including superannuation funds, listed companies and life insurers. 

“The FAAA remains very concerned about the fast-increasing cost of the ASIC levy,” its submission said. “These rapidly increasing costs are a factor in the increasing cost of financial advice to consumers.” 

The peak body says ASIC has consistently rejected its requests for more information, leading to a lack of faith in the fairness and efficiency of the regulator. 

“As a matter of basic fairness, ASIC ought to disclose more detail regarding how their funding is spent. Financial advisers have a right to know what activities they are paying for, and this will also lead to greater confidence in the system by ensuring that any errors or misallocations can be resolved.” 

The FAAA urges the Government to implement changes to the ASIC industry funding model recommended by Treasury last year before the levy for this financial year is finalised. Treasury made recommendations in relation to industry funding levies, reporting, transparency and consultation. 

The submission says the Government’s plan to reform the advice sector by permitting financial product issuers such as banks and life insurers to give financial advice on their products outside the current regulations could pose a cost challenge. 

Since financial product issuers’ staff are not professional advisers, the FAAA says ASIC costs must be clearly allocated to the sector of the employing entity, or it could further confuse the allocation of ASIC enforcement costs in the financial advice space. 

Click here for more from the submission.