Holistic advisers will pay more on ASIC funding regime

5 May 2017

Financial planning businesses providing holistic advice are likely to pay more to fund the Australian Securities and Investments Commission (ASIC) than businesses providing general advice and wholesale advice to personal clients under draft regulations released by the Government this week.

This is because general advice providers will be covered by a flat levy which is not pro-rated while financial planning licensees providing holistic advice will be subject to a pro-rated regime that the Government intends will fully reflect the regulatory costs of overseeing their activity.

According to the explanatory memorandum accompanying the draft legislation, the type of levy and the formula for calculating the amount of levy payable is different for each industry subsector with the Treasury claiming “this approach is appropriate and equitable because of the range of industry subsectors regulated by ASIC, variations in ASIC’s regulatory costs for each industry subsector and the differences in size and levels of activity undertaken by each entity in each industry subsector”.

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“The regulations prescribe flat levies to apportion ASIC’s regulatory costs in subsectors where these costs are approximately the same for each entity and the administrative and regulatory burden associated with calculating more tailored levies outweighs the benefits of having additional granularity,” the explanatory memorandum said.

The sectors which will be subject to the likely, lower flat level are unlisted public companies, large proprietary limited companies,         registered company auditors, custodians, wholesale electricity dealers,  insurance product distributors, licensees that are authorised  to provide personal advice to wholesale clients only and licensees that are authorised  to provide general advice only.

The sectors which will be subject to the likely higher pro-rated levy are credit intermediaries, responsible entities, licensees that provide personal advice on relevant financial products to retail clients, over-the- counter traders, public (listed disclosing) companies, superannuation trustees and wholesale trustees.

Releasing the draft legislation this week, the Minister for Revenue and Financial Services, Kelly O’Dwyer said it represented the next step in meeting the Government’s commitment to having an industry funding model in place from 1 July 2017.


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Makes sense to me in this weird world. If you just tell clients to go and find any fund yourself, I only provide general advice, then obviously the client is fully qualified to take responsibility for a good choice and will undoubtedly be in a better position and have less risk. So it makes sense for ASIC to encourage this by giving general advice cheaper fees......

this is going to further deter client from seeking personal advice. at the end of day regularity cost has to be passed onto the clients. where the product pushers who operate under general advice license can get away with lower cost and not have to worry about best interest obligation.

This just makes the industry more attractive to scammers. High cost means people are looking for "cheaper" solutions. The scammer does not bother with licensing, so can undercut legal advisers and people will be actively searching for the scammer. ASIC will need more resources to chase these scammers, so can justify putting up fees and so the circle continues....

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