Treasurer announces ASIC levy relief

To help ensure Australians can continue to have access to affordable and professional advice, Treasurer Josh Frydenberg has announced “temporary and targeted relief” for financial advisers by cutting the cost of recovery levies charged by the Australian Securities and Investments Commission (ASIC).

Moreover, while the temporary relief is in place, Treasury is expected to kick off a review of the ASIC Industry Funding Model in 2022, to ensure “it remains fit for purpose”.

The current relief will see ASIC levies charged per licensee 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.

This would ultimately see ASIC levies charged for personal advice to retail clients restored to their 2018-19 level of $1,142 per adviser for the next two years (relating to 2020-21 and 2021-22).

“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.

“The freeze in the per adviser levy will provide financial advisers with the certainty they need over the next two years to deal with the impacts of COVID-19 and further regulatory reforms making their way through the Parliament, including the introduction of a Single Disciplinary Body and a Compensation Scheme of Last Resort.”

The Financial Planning Association of Australia (FPA) was quick to applaud the government’s announcement, noting the news “will provide some certainty and stability to financial planners”.

“This is a significant milestone for the FPA and our members as we have been calling for a review of the flawed model since it was first proposed and then introduced three years ago. We would like to thank the Government for listening to our concerns and those of our members,” said FPA chief executive Dante De Gori CFP.

Similarly, the national president of the Association of Financial Advisers (AFA), Michael Nowak, called the relief well timed.

“This is a much-needed move in the right direction, and I want to thank the Treasurer the Hon. Josh Frydenberg, MP and the Minister for Superannuation, Financial Services and the Digital Economy the Hon. Jane Hume and the Government for finally listening to the AFA and the advice sector,” Mr Nowak said.

“This is a significant first step in starting to address the practical impact of the reforms on the ability of financial advisers to offer everyday Australians sound financial advice to give them financial security and independence,” adding that a lot remains to be done to ensure financial advice can still be delivered in an efficient and cost-effective manner.