In its draft CRIS, the corporate regulator said the cost of regulating licensees that provide personal advice to retail clients was $55.5 million in 2022–23, down from $56.7 million budgeted last year.
The cost will be divided among a total of 2,655 AFS licensees, encompassing 16,019 advisers.
As such, advisers will pay a minimum levy of $1,500 plus $3,217 per adviser.
However, under the former government’s ASIC levy freeze, the costs actually charged to the sector amounted to $22.8 million. This meant that at the time, advisers were charged a minimum levy of $1,500, plus $1,142 per adviser.
Earlier this week, the government announced it will end the ASIC levy freeze implemented by the previous government during the pandemic.
The freeze was introduced in August 2021 by the-then treasurer Josh Frydenberg as “temporary and targeted relief” for financial advisers. Among other things, it saw ASIC levies charged for personal advice to retail clients restored to their 2018–19 level of $1,142 per adviser.
Despite calls for its immediate extension, in announcing the release of the final report on the review of the ASIC Industry Funding Model (IFM) on Monday, Financial Services Minister Stephen Jones said the freeze will not be extended.
According to the review, the levy relief cut the total regulatory costs for the sub-sector from $60 million in 2020–21 to $25.8 million, and from $56.7 million in 2021–22 to $22.8 million.
Levy breakdown
Costs for regulating licensees providing personal advice on products that are not relevant financial products are expected to be slashed from $73,059 to $65,295.
For licensees that provide general advice only, ASIC predicts that the regulation cost will rise to $2.8 million, from $1.3 million a year earlier.
For those that provide personal advice to wholesale clients only, costs are projected to reduce to $33,610 from $50,938.
On the insurance front, costs are expected to hit $28.04 million for product providers, with a minimum levy charged at $20,000 plus $5.23 per $10,000 of revenue above the $5 million threshold. In 2021–22, the cost of regulating the insurance product providers was $24.3 million.
Unfortunately the QAR did not address the ASIC levy fee, how is advice to be affordable when advisers are being hit with additional costs?
‘The cost will be divided among a total of 2,655 AFS licensees, encompassing 16,019 advisers.’
So if more advisers leave, does the aggregated $55m cost go down accordingly or does it stay constant (or even rise) and then the average cost per adviser of $3,217 goes up? If it’s the latter scenario, I’ll be throwing in the towel.
So disappointing. You would think that with the industry almost halving in size re adviser numbers in five years is a clear message of an industry already struggling and yet ASIC still decides to stick the knife in. Unbelievable.
Yet more costs to pass on to clients, making advice ever less accessible for those who need it most.
Government talks talks talks about being concerned about consumers who seek advice & the cost of advice… their actions speaks for itself. JOKE!
Well ‘fed up’, you need Treasury and the Minister onside to get things done…..getting between a pot of cash and Bureaucracy is a dangerous pastime, the only way to get most things done in Canberra is to be cashed up and fight fire with fire….until Advisers realize this and co – operate we will struggle……
My fees are increasing by 20% on 1 July 2023
Absolute farce.
Straw that broke the camel’s back. Time to exit!
I’ll move to an accounting business and provide unlicensed advice, much more profitable. If ASIC did something to earn their money I wouldn’t mind paying it but this is just a joke.
How can a Professional Advice practice even consider employing a young graduate to expand, whilst we are being held to Ransom by a bunch of Government Bureaucrats that write their own rules after every election?
So the remaining 16,000 professional advisers bear the brunt of funding ASICs requirements to prosecute the odd rogue advisers. This is a ridiculous approach that should instead be directed at any licensee/adviser who is proven guilty of misrepresentation. (i.e user pays !!!)
15,781 another 29 net exit last week.
What’s even more insulting is that ASIC don’t even offset any part of the Levy from their exorbitant infringement revenue that they collect from the banks. Those infringements would totally eclipse any Levy’s ASIC impose.
Also very typical of the labor govt to attack the small business and financial sector. If you’re a financial adviser and voted Labor then you have rocks in your head, seriously!
to be fair to Labour (and I’m not fan) the Liberal party wasn’t our friend here either.
I love how we as a cohort have to pay for the bad deeds of a few, maybe for those that action or proceedings are taken against need to reimburse some of the surveillance costs
It’s a Government Department that is for consumers. No other Professional Body on the planet funds a Government Department. Again Professional Advisers are being held to ransom. Every adviser should refuse to pay.
I know you can’t use cuss words in this forum so make your own version up…… $$$$$$$$$$$$ you ASIC! I can’t wait to see how much I also get to spend on the compensation scheme too.
Nice work making the cost of advice soooooo much cheaper [b]Hon[/b] Hot Mess.
Can anyone think of a higher regulated, more undervalued and more expensive profession to be in for my next career?
There’s a $1 a fortnight increase in fees passed onto consumers right there as a levy unrelated to advice
this is just going to be passed on to the consumer, great work, less advice to fewer Australians..
No need to worry, in the not too distant future consumers can get it directly from their super fund.
Ridiculous.
What a Joke
An incredible failure from the FPA and AFA (now FAAA) , SPAA and AIOFP for this to have happened. They are all so intent on getting along with the Minister and Treasury that they forget to actually represent the poor advisers.
It is the members of these organisations which are to blame for failing to hold them to account. I suggest you cancel memberships to help fund the ASIC tax.
Might as well factor in $10,000 in a year or two, what a rort…