The federal government has announced a temporary reduction in the adviser levy applied by the Australian Securities and Investments Commission (ASIC), with major industry bodies welcoming the relief measure.
Superannuation, Financial Services and the Digital Economy Minister Jane Hume said: “The relief will see ASIC levies charged for personal advice to retail clients restored to their 2018/19 level of $1142 per adviser for the next two years (relating to 2020/21 and 2021/22). The flat per licensee charge will remain at $1500.”
The relief measure would reduce the total amount paid in ASIC levies by $46 million in 2020/21, Hume added in a joint statement with Treasurer Josh Frydenberg.
The move comes after the financial advice sector voiced concerns regarding the unsustainable growth in the adviser levy, and the temporary reduction was welcomed by advice groups, but with questions as to why it was not applied more broadly.
Financial Planning Association (FPA) chief executive Dante De Gori said: “This is a significant milestone for the FPA and our members as we have been calling for a review of the flawed model since it was first proposed and then introduced three years ago.”
Association of Financial Advisers national president Michael Nowak said the reduction was a good start in addressing the impact of reforms on financial advisers.
“It was unjustifiable to expect advisers already dealing with this tsunami of reforms to have to find extra cash to fund a trebling of the levy over two years to support an industry funding model requiring small businesses to pick up the cost of litigation against large institutions,” Nowak said.
Stockbrokers and Financial Advisers Association chief executive Judith Fox also welcomed the reduction, but called for the levy to be applied on a different basis.
“We had called for a review of the ASIC funding model to make it more granular and risk-based to more accurately reflect the firms that are generating the enforcement and supervisory work,” Fox said.
“We therefore welcome the government’s review of the ASIC funding model and its recognition that the financial advice sector is under significant pressure. Advice to Australians cannot be made more affordable if the costs of providing that advice increase unchecked.”
Financial Services Council chief executive Sally Loane said the change was a recognition of the cost pressures for advice and “will give the 19,000 advisers in the sector hope the government understands the challenges facing the financial advice industry and will take further action to reduce the costs of regulatory burden on advisers”.
The major accounting bodies – CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants – stated they were “grateful” for the relief, but questioned why it was not applied across the accounting sector where other steep fee increases have occurred.
The three bodies noted the registration fee for registered company auditors had quadrupled since 2018/19 and insolvency practitioners were charged a levy of $2500 a year and then an additional level for a “notifiable event”.
“Today’s announcement recognises the debilitating impact that ASIC industry fees are having on the profession and acknowledges the government’s role in controlling fee increases. It doesn’t make sense to discriminate between participants by granting relief to some while ignoring others,” the bodies stated.
