Advisers have expressed ire at the corporate watchdog continuing to charge the industry funding levy during the coronavirus pandemic, despite it stepping down other regulatory measures.
An adviser who wished to be unnamed told ifa he received reminders of potential penalties from the regulator last week, if he failed to pay the Industry Funding Levy payment for his licence.
The adviser paid the levy, which was close to $24,000. But for a practice employing around 10 advisers, he noted the payment is unfair for smaller businesses running a “tight ship to remain compliant”.
“That [payment] actually constitutes two months wages for my staff; right now, that is an extremely useful amount of money to have set aside for business continuance.
“For advisers under other licensees, I know the licensee passes on the levy cost to each adviser. That would be over $1,000 each, possibly a month’s grocery bill for the families of those individuals. If the federal government is serious about keeping businesses running, a refund of the levy would definitely make a huge difference to the financial services industry.”
ifa has received similar comments from readers around the same issue, saying the regulator is continuing to charge practices compliance fees despite the easing up on other supervisory measures.
In response, ASIC said the levy invoices were dispatched on 31 January, before the crisis kicked off in Australia.
A spokesperson for the regulator said: “Anyone who is experiencing difficulties paying their levy should contact ASIC so we can discuss options.
“If ASIC agrees to a payment plan we will not charge late payment penalties as long as the revised payment dates are met.
“Waivers will be considered on a case by case basis where exceptional circumstances are demonstrated. Late payment penalties will also be halted while a payment plan or waiver application is under consideration by ASIC.”
ASIC and APRA have both alleviated certain regulatory mechanisms recently, in light of the virus shaking up the financial markets.
The corporate regulator in particular has canned its new supervision measures including the Close and Continuous Monitoring program, which saw ASIC staff on-site assessing major financial institutions.
It remains to be seen what its future plans are around the levy and if it will change its requirements.
But while the regulator offered to change payment plans, the adviser who spoke to ifa said it should be returning the fees to small practices.
“In these extraordinary times, ASIC, whilst gearing down like everyone else, in my opinion, should be refunding the levy payment to all small licensees at the very least, to help them stay open and keep staff employed,” the adviser said.
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