The Association of Financial Advisers (AFA) fears the proposed model for funding the Australian Securities and Investments Commission will be unfair on members.

It believes applying a levy across all advisers will hit those that meet all compliance rules.

CEO Philip Kewin says the AFA is not opposed to the regulator cracking down on bad advisers, but it objects to compliant members picking up the bill.  

“The AFA is very concerned the industry funding model will result in costs being passed on to all advisers,” he said. “Even those who are behaving professionally and ethically, making it even more expensive for them to provide advice to ordinary Australians.”

Mr Kewin says there is no provision for discounts for well-behaved advisers.

“This seems unfair, particularly when all advisers have already had to bear a raft of costs, including increased professional indemnity insurance premiums and costs associated with upgrading fee disclosure statements and incorporating opt-in arrangements,” he said.

“Any further increase in the cost of providing advice is likely to put quality financial advice out of reach of those who need it most. Financial advice should not just be for the wealthy and this model should not unintentionally facilitate that outcome.”

Mr Kewin says without a cap, there is no provision to contain the cost to advisers.

“The AFA recognises and is an active participant in measures to ensure the highest professional standards are maintained to protect the consumer,” he said.

“But measures should be practical, affordable and reward excellence.”