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The chief regulator of the mortgage broking industry has had its funding slashed following Tuesday night’s federal Budget.
ASIC has been told by the federal government that it will need to “adjust its priorities” after it was revealed that there would be a cut of $120 million in its funding over the next five years.
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According to the Budget papers, released yesterday morning, the regulator can expect an initial cut of $26 million between 2014 and 2015, while further cuts will save the economy $120.1 million over the coming five years.
"ASIC will adjust its priorities to ensure it continues to meet its statutory objectives," the papers revealed.
"The savings from this measure will be redirected by the government to repair the budget and fund policy priorities," it said.
It is predicted that ASIC may need to reduce staffing levels by more than 10 per cent over the coming year.
A recent straw poll conducted by The Adviser showed that 70 per cent of respondents believe ASIC is prejudiced against brokers, while only 2 per cent said they thought the organisation did a good job of monitoring the industry.
A common complaint is that brokers are often easy targets when things go wrong, while banks and major lenders are not held to the same level of scrutiny.
A feature article in the next issue of The Adviser reveals that ASIC’s scrutiny of the third-party channel could be contributing to its poor image problem. The feature also reveals that ASIC banned or jailed as many as 16 brokers between June 2013 and March 2014.
