IFA rails against regulatory levies

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The Institute of Financial Advisers is railing against the levy regulators will charge advisers to pay for the new regime, after Parliament approved regulations locking in the fees for authorisation.

Thursday, August 19th 2010, 6:00AM 3 Comments

by Paul McBeth

Parliament approved financial services regulations which lock in the fees advisers and qualifying financial entities will have to pay to be licensed.

An adviser will have to pay $1,120 for the initial authorisation, then $560 in ongoing annual fees. That's down the $1,385 flagged by the Ministry of Economic Development, though the ongoing fee is higher than the $410 of the first estimate.

Qualifying financial entities will have to pay $4,780 to register, with ongoing fees of $4,500, compared to the proposed $4,630 registration and $1,140 annual fees.

The fees are inclusive of GST, and the registry confirmed the fees will rise when the increased tax comes into effect in October.

"While there are no real surprises in these numbers there are still issues that advisers need to be aware of and continue to debate for the benefit of the regulators. That will be setting the so called levies," said IFA President Nigel Tate.

Tate said the cost of legislation will likely run into millions of dollars, and it should be split evenly between taxpayers and industry, as consumers will ultimately benefit from the regime.

"This in my mind is an unfair burden on the advisers as I feel this should be shared between the profession - that is all advisers - and the general public for whom these regulations were designed to benefit," Tate said.

"Central government should be carrying at least half of this cost on behalf of the general public," he said.

The government pumped in an extra $12 million last year to help fund the implementation of a regulatory body for advisers, with an expectation it will become self-funded through levies and fees by the 2011/12 financial year.

Paul is a staff writer for Good Returns based in Wellington.

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