The AFA has labelled ASIC’s industry funding levy increase for advisers as excessive and inequitable and has called for action.
The Funding Levy to be charged by ASIC for the 2019/20 financial year for financial advisers who provide personal advice to retail clients will be $1,500 per licensee plus $2,426 per adviser.
The association says this figure for the 2019/20 year was first brought to its attention by a document that was listed on the ASIC website late last year, and represents a 160 percent increase over a two-year period.
The history of the levy amount per adviser over the last three years was summarised by the AFA as follows:
Year Amount Increase
2017/18 $934
2018/19 $1,134 21%
2019/20 $2,426 114%
As to the driver of what it refers to as an “excessive increase”, the AFA notes that in the June 2020 ASIC Levy estimate document, the total spend by ASIC on financial advisers who provide personal advice to retail clients was projected to be $40.1 million.
“By December 2020, this figure had increased to $56.2 million, an amount that exceeded the cost of any other regulated community.”
The association says ASIC has not published a breakdown of the updated figure “… however we understand that the increase is largely related to enforcement action being taken against the large institutions who were the subject of case studies in the Royal Commission.”
“Disturbingly however, many of these same institutions have either exited financial advice or have significantly scaled back their operations. As a result, they have caused the increase, however, are not actually paying for this extra cost, and it is being left to small business financial advisers.”
…this is in our view, not an equitable way to operate
The AFA adds it has been told that if the court action by ASIC against the large institutions results in penalties, this will offset the levy in future years, “…however, this is in our view, not an equitable way to operate. Clearly the ASIC Funding Levy methodology needs to change”.
The association says it has escalated this issue to all those in the Government who it can “… however to this point the response has been little more than an acknowledgement of the issue and the problem that it has caused”.
It says it has also escalated the issue to the Treasurer’s Office:
“What has been made clear to us is that the ultimate decision maker on this is the Federal Treasurer, Josh Frydenberg. The Treasurer is also the person who has approved the funding increases for ASIC, following the Royal Commission.”
The AFA says it will continue to advocate with whoever it can to have the issue fixed, but that it is now very late in the process and invoices are scheduled to be available very shortly.
It calls on its members and other financial advisers to contact their local member of Federal Parliament or State Senator to express their concern, or alternatively go directly to the decision maker (see also: AFA Escalates Concerns on ‘Excessive’ ASIC Funding Levy Increase).
The association notes it has previously raised concerns with the Government about the 2019/20 levy.
where do they think us advisers are going to get the money for this? all viable fees and commissions are now turned off. we have to pay staff to do excessive compliance for basic advice and loans to pay on IP we owned but had taken away from us with no compensation….. I get they think we are like the insurers or the banks that print money at their free will……. what a beat up!
Blatant theft! ASIC seems determined to wipe out small businesses & for whose benefit? Certainly not consumers.
And you can put your house on it that ASIC are playing ‘union games’ here otherwise known as ‘mates rates which is plus 10% less 20%’.
They’ve whacked this ridiculous and targeted levy on us as high as it is in the hope advisers gullibly accept something in the middle of $2,492 and the $1,134 it was in 2019. Add this to the other BS fees through the TPB, ever increasing PI costs, CRM fees, Licensee imposed compliance and administration costs and its easy see why advisers are throwing the towel in and heading for the hills. And more importantly, why the industry is in free-fall from whichever angle you look at it.
This is very clearly an organisation run by people with a vacuum of ethical and moral behaviour. It is ASIC that’s caused the tragic demise of the financial services industry. It started with Report 413 and has just carried on since then.
Nicely summed-up. The fact that we have to pay a levy at all, whatever its figure is beyond comprehension. Using our funds, ASIC has the temerity to constantly add stratospheric layers of compliance, complexity, education and other diabolical non-essentials and then uses our funds as a club to beat us up with if we don’t do it all beggars the imagination! Unremitting gall!
Nicely summed-up. The fact that we have to pay a levy at all, whatever its figure is beyond comprehension. Using our funds, ASIC has the temerity to constantly add stratospheric layers of compliance, complexity, education and other diabolical non-essentials and then uses our funds as a club to beat us up with if we don’t do it all beggars the imagination! Unremitting gall!
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