The regulator released an estimate of costs recoverable to industries it supervises on Friday for the 2021 financial year, revealing that around $72.2 million would be payable by the advice sector.
This compares to $56.2 million charged by ASIC to the sector last year, when levies rose to $2,400 per adviser.
The regulator said of the total costs charged to the advice industry, $55 million would come from the cost recovery levy and $16 million from the statutory levy, which covered issues such as financial literacy education.
Of the $55 million, $16 million came from enforcement, $8 million from supervision and surveillance, and $22 million from indirect costs including governance, property and IT support.
A further $600,000 was to be charged for further recovery of last year’s costs, indicating expenses charged to the sector may have exceeded even ASIC’s final estimates for the year, which were 60 per cent above what was outlined at the end of FY20.
The news comes following dramatic rises in the supervisory levy for the advice industry since ASIC’s industry funding model was introduced, with costs per adviser having risen around 30 per cent year-on-year to $2,400 in the most recent financial year.
Numerous industry bodies have called for the levy to be capped or for the recovery model to be amended, with the advice sector already under immense cost pressure due to successive waves of regulatory change following the royal commission.
So we pay taxes as individuals already at some of the highest rates in the developed world (add CGT, FBT, Medicare, Stamp Duties, GSTs, LCTs, etc and it’s even worse). THEN we pay taxes on our businesses also. Yet then we also have to pay a THIRD time by way of a levy which let’s be honest is just another tax? If anyone else has ever experienced ASIC’s staff’s incompetence firsthand I’d love to hear about it because from what I’ve seen it’s us paying for a large group of highly inefficient, incompetent, undereducated, inexperienced folk who obviously follow the mantra of those who can’t do teach (teach is probably a gross overstatement though given the fact that their example RoA has been seen by many to be against the very rules they have judged countless Advisers on over the years and kicked out of the industry). Perhaps we should just start doing what every other business does in such situations and increase costs to our clients to cover the cost of levies, taxes, lawyers, etc. But then again, we have ethics and wish to help people – ASIC just wish to rule and pillage it would seem.
Ok let’s all be honest we all should be planning for this. With all the cost blowouts forced etc the average financial planner needs to put his fees up by 10% to cover regulatory and CPI on rent/wages etc
So average financial planner has 80 clients @ 4K fee. This now needs to be 80 clients @ 4.5k fee so 40k increase to cover it all
Add a few more clients in and you’ll be fine
Look to get to 120 client utilising technology etc and you be better off
I love this industry
Sick of incompetent and corrupt ASIC shaking us down each year for money. The mafioso at least treat you with some respect
Just added a new row to soa disclosure template under SOA fee called Asic Levy which will be equal to 30% of each Soa and ongoing fee. Your move Hume.
And what’s anyone going to do about it, most likely nothing
Realistically what can you do? ASIC control financial planning and until there is 1 adviser left they will just keep doing what they are already doing.
I guess advisers shouldn’t have taken the mickey for the last 40yrs……
What a stupid comment…. How many advisers who’re focussed on the next 10-20 years were taking the mickey for the last 40…
That’s my point, the dodgy-ness of the last 40 has screwed up the future. The ones from the past 40yrs are well gone or going now.. Good luck to the current ones going forward.
perhaps dodgeyness of the big banks should be the point
This means that we will have the ASIC Supervisory Levy, plus the Compensation Scheme of Last Resort, plus the ever increasing PI Insurance Premiums.All of this means the 99% of advisers who have and continue to do the right thing by their long term clients are footing the bills for the rogues who rip of their clients by giving totally inappropriate advice and then walking away for others to pick up the pieces when the client suffers financial damage. Explain to me how this can be considered fair and equitable. On top of the above is the ever increasing costs of servicing clients due to the ever changing and increasing regulatory requirements being driven by treasury bureaucrats whose agenda is to drive financial planners out of business to do the bidding of their Industry (Union) Super Fund mates.
don’t forget those unlicenced ‘advisers’ who don’t have to pay any of these fees
I’m not convinced Treasury’s agenda is to drive advisers out of business. I think it is more so that because they are PAYG Public Servants who receive a weekly pay packet regardless of whether they are productive or not, they simply have no idea what it costs to own and operate a business.
stop the complaining and Take action, the FP sector needed change FOFA, FASEA etc but this gone behind a joke
i am passing EVERY CENT of this AND the ASIC levy on into pricing. EVERY LAST CENT plus 20% on top to account for “unexpected future increases”
That will work well for client retention
Realistically it is the only way to stay in business and earn a profit.
The treasurer is just a scumbag, there is really nothing else left to say. He would be better suited to being a mafioso.
Let’s be thankful they are not charging $500 million or is that me just looking ahead?
Something strange here. This levy is paid by customers and is rising out of control.
So is red tape – a minimum of three signatures every year when there was none in the past – and the regulatory risk is incredibly high.
Clearly somebody wants advisers to be out of business.
Blatant extortion, nothing less. This country is fast approaching fascism.
ASIC is like a Mafia organisation! Charge us what they want with no accountability!
It’s time our industry associations grow a pair and stand up to ASIC and treasury. Use the membership fees I’ve been paying you and received nothing in return to now open the war chest and retaliate. If you don’t, the AFA will not be here in 2 years and the FPA will be representing industry super.
The FPA acts like it is not interested in representing advisers yet advisers still support them. Its like the trees supporting the Axe solely because the Axe handle is made of wood and claims to be one of them as its cuts the trees down.
Are you completely ignorant of the fact that many of us are required to be members of the FPA or do you just simply ignore this fact?
I am not a big fan of ASIC either and if I had a choice I would not support ASIC – but it looks like I will be increasing my love for ASIC by another 30%. This is the problem. Far to many people in ASIC, FPA, Compliance, ASFLs. Product Provides checking SOA etc that are being paid from our clients no one it seems is able to stop these people making a ever increasing living off of our client – but it does not mean I support them.
Why are you required? If your licencee is forcing you, then move. If it’s for the CFP – Noboby cares about the CFP. This is the biggest con job since the Loch Ness monster. The FPA is not mandatory.
All I want to know now is when it comes out so I can be gone 24 hours earlier. I am not paying this.
I still do not understand why the settlements and fines which ASIC / the govt reap from taking action against advice businesses (read banks) are not used to firstly fund the costs. Why do the remaining (good) advisers foot the bill for the action, yet receive no monetary benefit from the money raised. It is ludicrous!!
That’s actually one of the most sensible comments I have read here.
What an absolute grub the Treasurer is. Absolute grub.
No more words.
Could see his intent years ago , former investment banker so it should be no surprise.
Told ya so! $4,800 per adviser is what I have been saying for 6 months.
My previous tag line of “1% pay for the 99%” form the CSLR $12 mil in costs applies to this article just as well.
[b]HUMME and FRYDENBURGER MUST GO!!!!!!!! Go back to Australian Super and your Big Bank Buddies![/b]
Remember this is the estimate, and we all know the end number will be significantly higher than the estimate. What a scam.
Its ok, Jane Hume and the Government are “committed to making advice affordable”…. Total Muppets!! Visit your local Labor MP. Whilst many think it might be dancing with the devil, they actually love having something to point score with the government. Many Labor MP’s and some senators helped get the FASEA extensions through.
well done ASIC, the cost for delivering advice will continue to skyrocket, but it’s in the public’s interest.
This is insane! This cannot be allowed to continue!
With the very recent suggestion we will need to pay for the compensation scheme as well I can’t ignore the fact it feels like all external parties to us are trying to bury us all.
I was one of the positive guys through FASEA and LIF – managing to keep my chin up.
I’ve been trying my best for my clients’ sake to keep their fees from skyrocketing.
We can’t keep this up – and our clients are going to be the losers.
ASIC is out of control.
They feel so emboldened they will continue down this path every year until advisors are all driven out because of the costs.
When will this cease? I suppose when there are only 1000 advisors remaining will the levy per advisor be $2 m?
highway robbery