No Extension to Adviser Levy Relief

Financial Services Minister, Stephen Jones has announced that the temporary levy relief for personal financial advice licensees will not be extended further.

In releasing the Final Report on the Review of ASIC’s Industry Funding Model, Jones says the review also considered the temporary levy relief that was in place for 2020‑21 and 2021‑22, saying it will not be extended for this sub-sector.

The relief saw ASIC levies charged for personal advice to retail clients restored to their 2018-19 level of $1,142 per adviser for the financial years 2020-21 and 2021-22. (See: Win for Advisers on ASIC Levy and Call to Extend Adviser Levy Freeze.)

Jones also noted that the Review recommends “…reviewing each of the four sub‑sectors that fall within the financial advice sector and whether the existing sub‑sector definitions, metrics and formulas remain appropriate.”

He says this will be progressed alongside implementation of the Government’s Delivering Better Financial Outcomes package which includes its response to the Quality of Advice Review.

Jones says  the Review was led by Treasury in consultation with ASIC, the Department of Finance and the Department of the Prime Minister and Cabinet.

It found that the settings of the ASIC Industry Funding Model “…remain broadly appropriate but that refinements can be made within the existing framework to improve the way regulatory costs are recovered and to communicate IFM settings to industry more effectively.”

The Review makes 10 recommendations, of which four are directed to ASIC. Key recommendations Jones highlights include:

• Spreading the costs of certain regulatory activities (taking action against unlicenced operators, regulating emerging sectors, and capital expenditure) either across a wider population or over time to recognise the wider benefits of those activities
• Undertaking further consultation to ensure sub‑sector definitions, metrics and formulas used to calculated levies remain fit‑for‑purpose
• Delegating the fee‑setting power to ASIC to ensure fee amounts continue to reflect full cost recovery
• ASIC to enhance its reporting, transparency, and consultation arrangements on the IFM

Jones says the Government is committed to maintaining appropriate industry funding arrangements for ASIC and that it will  work with the commission, industry and other stakeholders to implement these recommendations.

The Government also supports “…ASIC taking action to implement the recommendations directed to it, to improve its engagement with industry and to streamline its reporting arrangements, particularly through its Cost Recovery Implementation Statement.”

Riskinfo understands an announcement regarding the new amount of the levy is imminent and we will advise further details as they come to hand.

Click here to read the full report.