UK financial advisers are not the only ones struggling with a continuously rising industry levy.
So, could a recent suggestion from The Advisers Association (TAA) in Australia work here?
In the wake of an exponential increase in the Australian Securities and Investments Commission (Asic) levy, TAA has called for government relief for advisers and planners, plus for “major banks and institutions exiting advice to pay an exit levy”.
TAA chief executive Neil Macdonald commented: “As it stands, the Asic levy is only being allocated to those advisers and licensees who choose to remain the industry.
“By exiting advice, the major banks, despite being largely responsible for some of the poorest behaviours, are able to avoid paying their fair share. It’s simply not good enough.”
How much?
The suggestion from the association is to impose an exit fee of around A$7,400 (£4,119, $5,730, €4,806) per adviser on major banks and other institutions that jettison their advice networks.
This is calculated as a three-year multiple of the current levy, based on their adviser numbers at the date of the Hayne Royal Commission report.
“Expecting [advisers remaining in the industry] and their clients to just keep paying ever-increasing costs for the sins of the past, largely committed by the big end of town, is unconscionable,” Macdonald added.
While not opposed to a user-pays model, Macdonald says TAA thinks the original cost of around A$900 per adviser was about right.
“What we have now is an abnormal market where the worst users don’t have to pay because they exited.
“They should not be allowed to just walk away from the levy scot-free.”
Would it work in the UK?
Admittedly, there are fewer big banks and financial institutions operating in the UK advice space, so a direct comparison is not straightforward.
Conversations in the UK also tend to revolve around making polluters pay, whereby those causing the problem are made to pay to clean it up.
But that doesn’t work if the company has gone bust.
If a business exits an industry – is it fair that they should continue to contribute to funding it?
Let me know your thoughts in the comments section below.
