The Financial Advice Association Australia (FAAA) has expressed its concern the material increase in the Australian Securities and Investments Commission (ASIC) funding levy for 2025/26, along with the Compensation Scheme of Last Resort (CSLR) impost, will be crippling for members.
ASIC earlier this week announced licensees providing personal advice to retail clients on relevant financial products would have a minimum levy of $1500 plus $3037 for each authorised representative in 2025/26, a significant increase on the per adviser levy of $2398 for 2024/25.
Combined with the recently announced CSLR special levy totalling $170.3 million, the FAAA estimated government charges could reach well over $5000 per adviser this year.
“We do not yet know how the special levy will be allocated. However, if the waterfall model proposed in the most recent CSLR consultation were to be used, advisers could pay an additional $20 million this financial year, on top of the $20 million base levy already paid,” the industry body said in a statement.
Given the current number of 15,000 advisers, that works out at another $1300 per adviser this year, in addition to the $1312 each adviser has already paid for the sector cap.
“This is a crippling cost imposed on a sector that is almost entirely made up of small businesses. It underscores the critical importance of the government taking action to address the sustainability of the CSLR and to reduce these levies,” the association noted.
The financial planning body indicated although ASIC pointed to higher “enforcement costs” as the reason behind the increased funding levy, the corporate regulator has not provided information on the reasons for such a rise in those expenses or where the total of $24 million it said was allocated to the financial services sector was spent.
It also pointed out ASIC has been awarded over a record $800 million in fines by the courts with respect to cases it has brought. Such fines could be used to offset both the ASIC and the CSLR funding levies, it suggested.
“It is unreasonable for the financial advice profession to fund this enforcement activity when all fines are paid straight to consolidated revenue for the benefit of the government,” it said.
