Each year, ASIC relies heavily on the industry funding levy, which in FY25 will raise to about $349 million, alongside a further $20 million from the Compensation Scheme of Last Resort. Together, that’s more than $369 million directly from industry.
But this model concentrates the burden on relatively small segments of the financial services profession. For example, the estimated cost recovery amount for licensees providing personal advice to retail clients stands at $39.3 million. That covers just 2680 licensees and around 15,233 advisers. In practice, each licensee pays a minimum levy of $1500 plus $2314 per adviser.
This is a striking imbalance. When collapses like Dixon Advisory or the Shield and First Guardian master funds occur, the costs fall disproportionately on a narrow base of professionals, regardless of whether they had any connection to the misconduct.
In August, ASIC Chair Joe Longo flagged the need for additional funding to meet the regulator’s growing responsibilities.
Cyber resilience, data capability, and market surveillance are expensive but essential investments. ASIC cannot do its job of safeguarding markets and consumers without a stable and predictable revenue stream.
The question is not whether ASIC needs more funding it’s about how we fund it fairly and sustainably.
Australia’s financial ecosystem is vast, with superannuation and managed investment pools now exceeding $8.65 trillion. Against that backdrop, ASIC’s funding requirement – around $349 million this year and expected to rise – represents only a minute fraction of the total.
Here’s the thought experiment: if we applied a levy of just 0.005 per cent to that $8.65 trillion, it would raise around $432 million — comfortably covering ASIC’s needs, the CSLR, and even providing a buffer for the future.
Numbers in the trillions are hard to grasp. So, let’s bring it down to the individual level.
The average superannuation balance in Australia sits around $160,000. A 0.005 per cent levy on that balance equates to about $8 per year. Less than the price of two coffees.
For that negligible cost, every investor could contribute to a system that funds ASIC properly, ensures fair compensation for consumers, and builds a financial buffer to deal with the next collapse, without concentrating the pain on a small corner of the industry.
Surplus funds could accumulate into a reserve, ensuring ASIC and the CSLR are prepared for large-scale events. Instead of scrambling for funds each time there is a crisis, the system would already have the resources in place.
We already use this approach elsewhere. Every property owner pays a small levy on council rates to fund fire and emergency services. No one questions the fairness of that system because everyone benefits from its protection.
This is not just about today’s funding challenge. It’s about creating a fair, sustainable framework that protects consumers, stabilises the industry, and gives ASIC the resources it needs to do its job properly.
With Daniel Mulino taking up his role as Minister for Financial Services in the re-elected Albanese government, the timing is right to explore solutions like this that ensure funding is secure, fair, and future-proof.
Rob Pyne is the founder and CEO of HPH Solutions, an independent and employee-owned financial planning firm headquartered in Western Australia.
I can come at that @Rob Pyne.