Call for licensee levy increase to address cost asymmetry
A financial adviser has launched a petition for the portion the ASIC levy paid by licensees to be increased ahead of the next levy schedule.
Matt Grant, partner and financial planner at Voyage Financial in Fremantle, Western Australia, believes licensees should bear more of the levy burden rather than advisers.
He is concerned by the significant increase in levy for advisers while the amount payable by licensees of $1,500 remains unchanged, despite the costs now being borne by far fewer advisers, thanks to the adviser exodus.
Currently, there are around 15,646 financial advisers, but the number of AFSLs is increasing as people opt to leave large licensees and set up their own, which Grant feels will worsen the situation.
The latest ASIC stats in its summary of 2022–23 levies show there is a minimum levy of $1,500 for licensees plus $2,818 per adviser for licensees that provide personal advice to retail clients on relevant financial products.
This is up from $1,142 per adviser previously, although it is a reduction from a previous figure of $3,217, which was reduced due to the industry backlash.
Grant said: “We are concerned by the significant cost asymmetry that has emerged between individual financial advisers and AFSL holders. It is AFSL holders who are responsible for the conduct of the advisers who operate under their licences, and who must ensure that the financial services their advisers are authorised to provide are delivered honestly, fairly and in accordance with the law.
“We submit that ASIC’s main regulatory focus (and therefore its costs) relate to AFSLs rather than individual advisers.
“We therefore ask Minister Stephen Jones to, by regulation, increase the minimum amount payable by an AFSL from its current fixed amount of $1,500 before invoices for the levy are issued in early 2024 to ensure equitable outcomes for the financial advice sector.”
He proposed a model where 75 per cent is paid by the licensee, who he said is the entity that ASIC primarily deals with, and 25 per cent by the adviser. This would see the levy move to $12,905 per AFSL and $772 per adviser.
If it moves to a 50:50 ratio, the proportion will be $8,603 per AFSL and $1,544 per adviser.
Invoices are due to be sent between January and March each year, and are due for payment within 30 business days.
The closing date for signatures to Fairer outcomes for the ASIC Supervisory Cost Recovery Levy
Petition is on Thursday, 15 February.