ASIC funding model gives advice sector $24m levy

Personal advice providers on Tier 1 products will be levied the most, at $22 million to recover ASIC’s costs or $960 per adviser on the financial advisers register.

Personal advice providers on Tier 2 products will be levied $900,000. General advice providers to retail and wholesale clients will be charged $800,000 and wholesale advice providers to wholesale clients will be charged $200,000.

These levies are different from those in an August 2015 consultation paper, which proposed a levy on financial advice providers on Tier 1 products that involved a fixed component of $1,350 and a variable component of $470 per adviser.

“Submissions strongly opposed this model due to concerns it would place a larger burden on smaller licensees relative to larger licensees due to the fixed component. This concern has been addressed by moving to a fully variable levy,” the new report said.

However, the paper said ASIC does not propose to charge a separate levy on robo-advice providers “at this time”.

The new funding model is part of a package of reforms the government announced in April in an effort to bolster the role of ASIC.

“The proposed industry funding model will include measures to support ASIC becoming a stronger regulator through increased accountability, transparency and engagement with consumers and its regulated entities,” the paper said.

Submissions on the proposals paper will be open until Friday, 16 December, with a view to implement the funding model in the second half of 2017.