ASIC confirms advice industry levy debt at $2.4m

The financial regulator has revealed that total regulatory costs yet to be recovered from the financial advice sector stood at $2.4 million as at 30 June 2021, substantially higher than funds owed a year earlier when the sum stayed well below $300,000.

The total regulatory costs for the sector in the FY2019–20 were however substantially higher than in previous years and reached $59.59 million, as opposed to $34.07 million in FY2018–19 and $28.26 million a year earlier.

According to the data that the Australian Securities and Investments Commission (ASIC) provided in reply to a question on notice to the standing committee on economics, the median levy for licensees that provide personal advice to retail clients on relevant financial products was $3,926 in FY2019–20, $2,642 in 2018–19 and $2,434 in 2017–18.

The most recent fee consisted out of the minimum levy of $1,500 plus $2,426 per adviser. 

Last week, Treasurer Josh Frydenberg announced “temporary and targeted relief” for financial advisers in the form of a cost cut of the recovery levies charged by ASIC.  

“The sub-sector as a whole will pay an estimated $46 million less in ASIC levies in 2020–21 alone, with further savings flowing in 2021–22,” the Treasurer said.

Under the announced cut, ASIC levies charged per licensee will remain at $1,500 — a substantial reduction relative to the level estimated in ASIC’s 2020–21 Cost Recovery Implementation Statement of $3,138 per adviser.

Moreover, ASIC levies charged for personal advice to retail clients will be restored to their 2018–19 level of $1,142 per adviser for the next two years (relating to 2020–21 and 2021–22).

While the temporary relief is in place, the Treasury is expected to kick off a review of the ASIC industry funding model in 2022 to ensure “it remains fit for purpose”.