financial advice, Regulation

FAAA cautious about ASIC levy

adviser levy ASIC Cost Recovery Implementation Statement FAAA Financial Advice Association Australia Sarah Abood

The Financial Advice Association Australia has noted the latest proposed figure for the ASIC adviser levy is only an estimate and is still too high given the income the regulator generates from penalties each year.

The small increase in the level of the proposed adviser levy to be charged by the Australian Securities and Investments Commission (ASIC) is not locked in, the Financial Advice Association Australia (FAAA) has noted, adding it is still too high and government should heed calls for it to be reviewed.

Responding to the release of ASIC’s Cost Recovery Implementation Statement (CRIS) for the 2024 financial year, FAAA chief executive Sarah Abood was cautious about the projected adviser levy, which will only increase by $60, the lowest annual rise since the impost was introduced in the 2018 financial year.

“At first glance it seems that the ASIC levy per adviser will not move very much for this financial year, compared to the final levy for the 2022/23 financial year, which was $2818 per adviser,” Abood said.

“It’s important to bear in mind that this is just an estimate and the final amount could change.”

The levy is set under the CRIS, which was certified by ASIC chair Joe Longo in May and approved and released by Assistant Treasurer and Minister for Finance Stephen Jones earlier this month before its public release yesterday.

Following the collection of annual returns in July to September, ASIC will finalise its regulatory costs and publish the actual levies that will be collected, with levy notices being issued in early 2025. As part of this process last year, the estimated adviser levy fell from $3217 to $2818.

Despite the slight estimated increase, Abood said the levy was still too high given the changes that have occurred in the advice sector.

“We think this amount remains much too high for a shrinking small business financial advice sector, the vast majority of whom are doing the right thing, yet are paying for supervision and enforcement against those who are not, including those who are unlicensed,” she said.

“We continue to advocate strongly for the ASIC levy to be reduced, along with more transparency on how these costs are arrived at.

“Again, we call on the government to implement the findings of the 2023 Treasury review into ASIC’s industry funding model. That report was delivered over a year ago now and seems to be gathering dust.

“More recommendations to help make the levy fairer and more sustainable are also contained in last week’s Senate Economics References Committee report into the capacity and capability of ASIC, to which the FAAA contributed.

“As this report notes, ASIC is a highly profitable operation for the government, making a surplus of $1.4 billion in the 2022/23 financial year. This is in large part because fines and penalties associated with enforcement actions are paid into consolidated revenue.

“Government has plenty of room to make the levy fairer and more sustainable.”

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