The ASIC funding levy for 2022-23 has been reduced from its original estimates, after criticism that the increase to $3,217 was too high.
The industry funding levy had been frozen for two years in light of the COVID-19 pandemic but was reintroduced this year. However, advisers felt the increase from $1,142 to $3,217 was too high.
Following a change, the final amount will now be around $400 less per adviser than the original estimate and the total cost for the sector has reduced to $47.6 million, a reduction of almost $8 million.
This covers licensees that provide personal advice on relevant financial products to retail clients.
The levy for them will now be $2,818 per adviser, down from $3,217 initially forecast. This was a 180 per cent increase from the figures in 2021-22.
The levy metric is based on the number of relevant providers (within the meaning of s910A of the Corporations Act) on the Financial Advisers Register (FAR).
A statement from the Financial Advice Association of Australia (FAAA) said: “When ASIC published thir 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. The FAAA challenged this number and the underlying methodology used to arrive at it, as well as the lack of transparency in the calculations.
“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.”
However, the organisation said it “remained concerned” about the overall size of the levy, despite the decrease, and would continue to work with ASIC, Treasury and Minister for Financial Services Stephen Jones on improvements to the industry funding model.
Earlier this year, financial adviser Ross Smith said the levy increase had caused him to double the ongoing advice fee for his clients to meet the cost.
Smith of Shenton Limited said he has 10 advisers at his practice, which means his latest ASIC levy is $35,000 a year – triple his annual profit.
“We don’t have the cash to pay that, and it is impossible to budget for because we don’t know how much it will be. ASIC works it out based on the last financial year, but we don’t get the invoice until January next year so we can’t budget for it.
“What this means is we have to go back to our clients again and get them all to sign new forms to double their ongoing adviser services fee just to pay for the levy. All my clients are old pensioners with the age pension and a small superannuation.”
15,000 residual Advisers left paying for the sins of “MoneywithMaddie” on Insta. Given the Billion dollars lost to investment scams last year this approach smells like all we’re doing is creating jobs for Public Servants.
Seems to be or is?
talk about feeding the fox in the hen house?
how stupid are these PUBLIC SERVANTS IN ASIC
Five liberal gov’ts tried to destroy the industry, and i believe turn us all into nice controllable wage erners under a few hugh licensed dealers who would be easy to keep in line..Did not work we chose to leave the industry instead. this is what lead to the brand new term MICRO I SEE DISCUSSED IN ANOTHER email. We all feel a responsibility to our clients, that is why i worked so long. But selling out was still painfull. These costs were being forecast at the time, i new i had to go. JG
Every week there seems to be an advisor being reported for not being honest with his/her clients. There should be no decrease in the scrutiny of advisors or penalties for misbehaving advisors.
No-one is arguing that Hedware. The police are funded by the entire community to chase the very low percentage of citizens that are criminals. In this case a small section of the community is being targeted for funding and keystone cops in ASIC and they provide no transparency on the allocated costs of doing so.
Why should this industry not pay for the regulation of its members? That’s what being a professional body is all about. Anyway ASIC is being transparent as it openly reports the miscreants and seemly makes reports every week. ASIC’s is treating the symptom and not the cause – that is if there are no dishonest advisors et al, then the costs to industry would be nil.
ASIC are out of touch with reality with this Levy. They are penalising the honest hard working financial planners for the wrongs of a small few. They really need to feed back into their system penalties they have acquired from large corporates who have offended on a large scale. If these remedies were filtered back into the system our individual levy would be far less and far more realistic. The levy continues to increase the cost of advice to consumers at a time when the Government is saying financial advice is unaffordable to most Australians.
Taxes fund Govt departments, this is theft pure & simple.
Thank you, however ASIC has avoided public disclosure of its 2022-23 investigation and enforcement costs to the Senate Economics References Committee, after Treasury’s IFM Final Report dated 23 June 2023 reported that advisors are levied for costs not directly connected to advisor’s listed on ASIC’s Financial Adviser Register. I sent an FOI Request to ASIC and again it avoided these disclosures. Enforcement penalties are not credited back to levies, eg, Westpac’s $10 million, and Hon. Stuart Roberts said in an interview earlier this year that Treasury is making 1.6 times ASIC’s enforcement costs. Are advisors ‘being skinned alive’?
Well, tell Jones my prices are going up… again!
It is still too much. This great big tax from Freedenberg and Jane Hume should be scrapped.