The SMSF Association has welcomed the federal government’s decision to grant a temporary reduction in the levy charged to financial advisers by the Australian Securities and Investments Commission (ASIC).
The government yesterday announced it will halt any increase in the ASIC levy for two years and apply a reduction, with costs set to return to the 2018/19 level of $1142 per financial adviser, as opposed to the 2020/21 cost, which was estimated to be $3138.
SMSF Association chief executive John Maroney noted the targeted relief measure is a positive sign of recognition of the changing shape of the financial advice industry.
“We strongly believe that the recent increases in the ASIC levy are unsustainable and are being unfairly borne by the current population of financial advisers,” Maroney said.
“When the levy was introduced, there were 26,000 financial advisers, a figure that has fallen to nearly 19,000. Consequently, the cost per adviser has been rising exponentially.
“It’s also worth noting that a large portion of individual financial advisers work in small and medium-sized businesses and don’t have capacity to absorb large and unpredictable increases in costs. So, these costs are ultimately borne by consumers, making financial advice even more unaffordable.
“The freeze in the per adviser levy will provide advisers with much-needed certainty and breathing space at a time when the advice industry is not only dealing with the impact of COVID-19, but is facing long-term structural change with the introduction of a single disciplinary body and a compensation scheme of last resort currently before the parliament.”
In announcing the levy relief, Superannuation, Financial Services and the Digital Economy Minister Jane Hume said the ASIC industry funding model review would commence in 2022, which Maroney noted was an issue the SMSF Association advocated for.
“Significantly, the government has also signalled it will review the ASIC industry funding model, an initiative we have been calling for almost since the inception of the levy under the Australian government cost recovery guidelines,” he said.
