The Financial Planning Association of Australia (FPA) has urgently called for the Australian Securities and Investments Commission (ASIC) to extend its freeze on the annual industry levy to cover the 2023 financial year.
The industry body has made the plea in an effort to provide financial planners with some cost certainty for the current income year. To this end, it has expressed its concerns practitioners could face a significant rise in their operating costs seeing the levy currently stands at $1142 per adviser and has not been increased since the 2019 income year.
While Treasury has committed to a review of the levy, the FPA is worried the findings of this process will not have enough time to be applied to 2022/23.
“Making financial advice more affordable for all Australians starts with making financial planning more affordable to practise,” FPA chief executive Sarah Abood said.
“There are activities that we’re aware ASIC undertakes that have nothing to do with financial planners yet are funded by financial planners in the current model. The government has had to intervene twice in the past five years because the model isn’t working as intended.
“It is important that any year-on-year increases better reflect the capacity of the financial planning profession.”
The FPA has also recommended a separate levy be charged to the six largest licensees, being AMP, ANZ, NAB, CBA, Westpac and Macquarie, to ensure the regulator’s costs for its ongoing oversight, remediation and litigation relating to these organisations is not borne by financial planners not linked to these actions.
“Consideration should be given to excluding these costs from the levy where these matters are ongoing until the litigation proceedings are complete and the matter has been determined by the court,” Abood said.
“This will make it clear whether ASIC has achieved a successful outcome in relation to the litigation and therefore whether costs will or will not be recovered from the entity subject to litigation investigation and proceedings.
“This will alleviate the inequitable upward pressure on the levy paid by participants not subject to this enforcement activity.”
