ASIC levy cut by $400 per adviser

In a statement on Thursday, the Financial Advice Association Australia (FAAA) confirmed that the corporate regulator has reduced the levy charged to advisers by $400.

“ASIC has released the final figures that will apply for the ASIC funding levy for the 2022–23 financial year, in two legislative instruments,” said FAAA chief executive officer Sarah Abood.

“Based on the information in the legislative instruments, we estimate that the final amount will be around $400 per adviser lower than the original estimate, at $2,818 per adviser.”

When the Australian Securities and Investments Commission (ASIC) published their estimates for the 2022–23 year, in June, the total cost recoveries for financial advisers providing personal advice to retail clients was estimated at $55.5 million, with advisers expected to pay a minimum levy of $1,500 plus $3,217 per adviser.

The FAAA challenged this number and the underlying methodology used to arrive at it, as well as the lack of transparency in the calculations.

“In these final numbers, the total cost for our sector has reduced by nearly $8 million to $47.6 million,” Ms Abood said.

“We have consistently and strongly advocated for relief for advisers on the ASIC levy, and we are glad to see that the government has listened to those calls," she continued.

Ms Abood noted that the FAAA remains concerned at the overall size of the levy, and the lack of transparency around how it is calculated.

“We will continue to work with ASIC, Treasury, and the minister’s office to support and encourage further changes including the implementation of the improvements to the Industry Funding Model that were recommended by Treasury in its recent review.

“Making financial advice more affordable for Australians starts with making financial planning more affordable to practice, and getting costs down for financial advisers remains a high priority for the FAAA.”

In August, Ms Abood brought up concerns regarding the ASIC levy and the corporate regulator’s lack of transparency before a parliamentary inquiry into the regulator.

“We think our members may be paying for expenditure that shouldn’t be attributed to them. However, we have no visibility of how ASIC attributes its enforcement costs,” Ms Abood said at the time.

“Very little information is provided to the regulated population on how its money is being spent.”

Ms Abood said “more transparency” would allow for any errors to be picked up, ensuring costs are being shared fairly.

“As I understand it, ASIC attributes enforcement costs first to the sector that it feels was attributable for the enforcement and I think that number was $18 million, and then based on the enforcement cost, it then attributes its fixed costs and its operating costs to sectors in the same proportion.

“So, we think that’s the reason why the cost for our sector has escalated so rapidly. That those enforcement costs may possibly have been attributed to our sector incorrectly.”

Under the former government’s ASIC levy freeze, the costs 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.