The Australian Securities and Investment Commission, the regulatory organization in charge of every one Aussie who has can lay claim to the honour of best financial adviser in the country, has recently gotten some flak regarding its new funding model.
The ASIC’s new pay model will be a ‘user pays’ model, where the financial advisors and auditors under the ASIC will receive new billing to fund the organization. CPA Australia’s business policy adviser, Gavan Ord says that these new fees are egregious, and might make it hard to attract more members.
For financial advisors, the effect is particularly bad thanks to these new bills kicking in at about the same time as new compliance fees that came in thanks to professional standards reforms as well as the establishment of a new complaints authority. CPA Australia’s advisers, some of the industry’s best financial adviser are saying that he problem lies in how these all add up.
Some are saying that the CPA Australia cannot see how these new fees relate to their actual costs, pointing to the AU$1,927 registration fee that self-managed super fund (SMSF) auditors have to pay, plus the deregistration fee of AU$899. To contrast, individual registered company auditors’ registration fee is only AU$338, plus the annual flat levy of AU$222, but these still generate more fees than an SMSF. The problem being that the registration costs for the SMSF are five time that of company auditors.
On top of all of that, there’s also the fact that the graduated fee is sill unknown, as they’ll be derived from the ASIC’s final costs, which won’t be revealed in October. The new model demands that ASIC needs to recover any money spent on regulating entities within a financial year, but that can’t be determined until the end of that particular year. This means that the AISC will collect data through July and September, before publishing the indicative costs on October, followed by an invoice with the fees to regulated entities on January.
The new model came into effect on the 1st of July 2017, and would allow it to allocate resources better. Some that doubt the new model, however, say that they need some level of assurance of what the new model will do and that the money will be used appropriately and effectively.