A petition asking the federal government to review the structure of the ASIC cost recovery levy has been set up by a Fremantle-based financial adviser, who believes the burden for funding the regulator is becoming shared inequitably between licensees and individual advisers.
Petition EN5784 – ‘Fairer outcomes for the ASIC Supervisory Cost Recovery Levy’ calls on the government to lift the levy paid by Australian financial services licensees from the current fixed amount of $1500.
Voyage Financial partner and principal financial planner Matt Grant says the precipitous drop in the number of practising advisers between 2019 and 2022 means a greater share of the levy is now being paid by those individual advisers remaining.
“Advisers are due to pay $2800 per adviser, whilst the licensee is only charged $1500,” Grant tells Professional Planner.
He says this does not reflect the actual regulatory activity in-market because ASIC doesn’t deal with every single adviser separately, but “deals almost exclusively with the licensee”.
“It is AFSL holders who are responsible for the conduct of the advisers that operate under their license,” Grant says.
“I understand the necessity for the levy and am more than willing to contribute. However, I’m concerned that a significant cost asymmetry has emerged between individual financial advisers and AFSL holders. This is only going to get worse as more AFSLs are created. A model that more closely aligns to the actual costs of ASIC is imperative.”
The Coalition government froze the ASIC levy in 2021, with the current Labor government announcing the end to freeze after the completion of the ASIC industry funding model review.
The advice sector was expecting to pay $1500 per licence plus a graduated component of $3217 per adviser, until the regulator confirmed the reduced figure of $2818 per adviser.
The petition set up by Grant says ASIC is aiming to recover about $47 million of costs from the advice industry.