The Australian Securities and Investments Commission (ASIC) has proposed a significant jump in levies for financial advisers as part of its recently published draft Cost Recovery Implementation Statement (CRIS) for 2019/20.
The CRIS, which outlines ASIC’s actual regulatory costs for the 2019 financial year and an estimate of costs for 2019/20, is intended to provide a guide as to what levy costs industry can expect for the current financial year.
In the CRIS, ASIC stated each Australian financial services licence (AFSL) holder offering financial advice will be expected to pay $1500 each, as well as a further $1571 per adviser operating under its AFSL.
ASIC said there are currently 3051 AFSL holders and 22,652 financial advisers, with a total sum of $40.17 million expected to be recovered through levies from these two groups.
The overall figure is a 38 per cent increase on the levies charged for 2018/19, in which 2985 AFSLs were levied at $1500 and 22,769 advisers under those AFSLs were levied at $907, for a total of $25.03 million.
ASIC added that “final levies to be paid by entities will be based on actual costs for 2019/20, which will be published in December 2020 and invoiced in January 2021”.
The regulator noted it would be open to feedback on the draft CRIS until 24 July, however, the Financial Planning Association of Australia (FPA) has already called on ASIC to reconsider the increase to the industry funding levy for financial planners.
“Financial planners were hit with a 22 per cent increase in 2017/18. Now ASIC estimates the levy will increase by 38 per cent for 2019/20. No matter which way you look at this, it is excessive at a time when financial planning professionals are working hard to help their clients through extraordinary circumstances,” FPA chief executive Dante De Gori said.
“As small businesses, financial planning practices also face the challenges that COVID-19 has created for the wider small and medium-sized enterprise sector. ASIC’s fee hike does nothing to support them or their clients during this difficult time.”
Last month, the Association of Financial Advisers noted ASIC might be the body to deliver an extension to the adviser exam deadline if legislation proposed by the government failed to pass through parliament before it sat again in August.
