SMSF Association Submission
The SMSF Association (SMSFA) welcomes the opportunity to make a submission on the introduction of the Australian Securities and Investments Commission’s (ASIC) fees-for-service consultation paper.
We understand that currently the fees associated with certain ASIC regulatory services do not fully reflect the costs incurred by ASIC in undertaking these activities. However, we have concerns that the proposed full fee-for-service recovery model is excessive in particular circumstances.
ASIC has stated that 10 per cent of its regulatory activities will be covered through fees-for-service. The remainder will be recovered through industry cost-recovery funding arrangements. Given that only 10 per cent of funding comes from fee-for-service activities, we believe that the benefits of completely recovering ASIC service fees are outweighed by the potential distortionary effects of substantially increasing costs for certain parts of the financial services sector. We are concerned that the exponential increase in costs of entry, particular for SMSF auditing and providing financial advice, will discourage innovation and competition due to new financial barriers to entry.
We therefore encourage ASIC to take a broader view of the effect of the proposed fees on the financial services industry. ASIC should not be purely focused on a system that results in full cost recovery but one that considers the effects of the increased fees on industry.
We have focused our submission on SMSF auditor registrations and Australian financial service license (AFSL) applications.