Cost of regulating advice down 7% from mid-year estimate: ASIC

The Australian Securities and Investments Commission (ASIC) has published its annual dashboard outlining regulatory costs by sector and subsector for 2023–24 under the ASIC industry funding model (IFM).

Unlike the figures reported in its 2023-24 Cost Recovery Implementation Statement (CRIS) in July, these costs, calculated at the end of each financial year, reflect ASIC’s actual costs of regulating the subsectors these organisations operate in.

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ASIC also published the variances between its estimated and actual costs for subsectors, with the amount it cost to regulate licensees that provide personal advice to retail clients on relevant financial products dropping 7 per cent from an estimated $48.4 million to $45.01 million.

This $3.3 million decrease also comes with some relief from the ASIC levy.

In its draft CRIS, the corporate regulator said the levy would amount to a minimum $1,500 plus $2,878 per adviser, which has now been reduced by $187 and sits at $1,500 plus $2,691 per adviser.

The levy is now also lower than in 2022–23, when it cost $2,818 per adviser, which had also been adjusted downward from $3,217 after widespread outrage and advocacy.

Around 40,000 invoices for the levies across all sectors will be issued to entities between January and March 2025.

“ASIC determines where it directs its regulatory efforts and resources based on our ongoing assessment of the threats and harms across the industries we regulate. As a result, levies can be difficult to predict and can vary over time,” ASIC said in a statement.

Costs for regulating licensees providing personal advice on products that are not relevant financial products had been expected to surge to $269,172 from $96,425, however, the actual costs fell 66 per cent to just $91,000.

For licensees that provide general advice only, ASIC predicted that the regulation cost would hit $2.99 million, up from $2.3 million a year earlier. This has also fallen, down 6 per cent to $2.8 million.

For those that provide personal advice to wholesale clients only, costs are still up considerably from $176,202 in the previous financial year, however they did not reach the $1.9 million that was estimated, instead hitting $1.62 million.

Across all sectors, the total regulatory costs to be recovered through levies for 2023–24 is $328.1 million, which is $17.5 million less than its estimated costs of $345.6 million.