The Financial Planning Association of Australia has hit back at the corporate regulator accusing it of price gouging after increasing the industry funding levy for financial advisers by 38%.
The FPA has urged the corporate regulator to reconsider the 38% increase to the ASIC industry funding levy as the nation enters its first recession in 29 years.
The calls come after ASIC released for consultation its Cost Recovery Implementation Statement 2019-20 (CRIS), which was prepared based on its planned regulatory work and budgeted allocation of costs at the beginning of the 2019-20 year.
ASIC estimated the industry funding levy for 2019-20 will be $1571 per adviser, a 38% increase on the previous year.
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The corporate watchdog is looking to recoup $40.17 million from 3051 AFS licensees with 22,652 advisers.
While ASIC states that the indicative levies for 2019-20 are an estimate, the FPA said a 38% cost increase per adviser is excessive and last financial year the final levy amount was even higher than the estimate.
FPA chief executive Dante De Gori described the increased levy as "fee gouging" and an unreasonable demand of financial advisers given the current economic environment.
"Financial planners were hit with a 22% increase in 2017-18. Now ASIC estimates the levy will increase by 38% for 2019-20," De Gori said.
"No matter which way you look at this, it is excessive at a time when financial planning professionals are working hard to help their clients through extraordinary circumstances."
De Gori said financial advisers are already under a great deal of pressure to meet new education requirements, await outcomes on the FASEA extension from an "unpredictable parliament" and overhaul their business models to meet regulatory requirements.
"As small businesses, financial planning practices also face the challenges that COVID-19 has created for the wider SME sector," he said.
"ASIC's fee hike does nothing to support them or their clients during this difficult time."
ASIC also announced that measures designed to make financial advice more accessible to Australians during the COVID-19 pandemic will be removed.
ASIC has set an end date of October 15 for the COVID-19 relief measures including relief to facilitate advice to individuals financially affected by COVID-19 about ERS, relief extending the period for giving Statements of Advice and relief to allow a Record of Advice to be given instead of a Statement of Advice in certain circumstances.
De Gori said the industry was not consulted on the decision, and had been a big help for Australians to have more affordable access to advice.
"ASIC had asked us to canvas members on their use of these relief measures and we are still in the process of compiling this feedback," De Gori said.
"It is too early to understand how long these measures will be needed and far too soon to be setting an end date, given that the feedback process is yet to be completed."