{"id":54097,"date":"2021-02-04T13:57:02","date_gmt":"2021-02-04T03:57:02","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=54097"},"modified":"2021-02-04T13:57:02","modified_gmt":"2021-02-04T03:57:02","slug":"call-for-review-of-unsustainable-asic-levy","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2021\/02\/04\/call-for-review-of-unsustainable-asic-levy\/","title":{"rendered":"Call For Review of ‘Unsustainable’ ASIC Levy"},"content":{"rendered":"

The FPA<\/a> has called for a review of the “unsustainable” ASIC levy as the regulator seeks guidance on affordable advice.<\/p>\n

(Also see: AFA Escalates Concerns on ‘Excessive’ ASIC Funding Levy Increase<\/a>).<\/p>\n

A statement from the FPA says it has made six recommendations in its Budget Submission 2021-22 aimed at addressing the rapidly increasing cost of practicing as a financial planner.<\/p>\n

FPA CEO Dante De Gori<\/strong> \u00a0says that making financial advice more affordable for all Australians starts with making financial planning more affordable to practise.<\/p>\n

\"\"<\/a>
Dante De Gori …the FPA has used its Budget Submission 2021-22 to tackle the key issues that should be addressed by the Federal Government.<\/figcaption><\/figure>\n

\u201cThis has been the focus of the FPA\u2019s policy work over the past year and formed the foundation of our new policy platform \u2013 Affordable Advice, Sustainable Profession \u2013 which was released in June 2020,\u201d he says.<\/p>\n

\u201cThe voice of the FPA, its members and the profession is now being heard. With ASIC recently announcing a formal consultation on promoting access to affordable advice, the FPA has used its Budget Submission 2021-22 to tackle the key issues that should be addressed immediately by the Federal Government.\u201d<\/p>\n

ASIC Levy \u2018Unpredictable\u2019<\/strong><\/p>\n

The association says it recommends that the ASIC industry levy be reviewed to provide a more predictable annual levy and constraining year-on-year increases to better reflect the capacity of the financial planning profession to support regulatory costs.<\/p>\n

It says that while the FPA supports an industry-funded regulatory model, two major issues have become apparent since the levy was first applied in the 2017-2018 fiscal year.<\/p>\n

\u201cThe levy amount each year has proved to be unpredictable, which makes it practically impossible for a financial planner to effectively budget for this business cost,\u201d De Gori says.<\/p>\n

The statement notes that for the 2018-19 financial year ASIC predicted in March of 2019 that the per financial planner amount for the levy would be $907. By the time invoices for that year were issued in January 2020, the per financial planner amount had risen to $1142. This is a 26 percent increase in just 10 months, the FPA says.<\/p>\n

Similarly, for the 2019-20 financial year ASIC predicted in March of 2020 that the per financial planner amount for the levy would be $1571. The FPA statement says it expects the amount will have risen further to around $2,000 – an increase of nearly a third.<\/p>\n

Fewer Financial Planners to Tax<\/strong><\/p>\n

\u201cSecondly, the levy has been increasing at a dramatic rate that far outstrips the rate of revenue growth for most financial planning businesses and is being exacerbated by a reduction in the number of financial planners from whom the levy must be recovered,\u201d De Gori adds.<\/p>\n

\u201cThe levy per financial planner has increased from $934 in 2017-18 to approximately $2,000 in 2019-20. In three years of operation, the levy for financial planners will likely have more than doubled and there is no indication that increases of this scale will cease for 2020-21 or future years.\u201d<\/p>\n

…the number of financial planners from which this budget must be recovered has fallen from around 25,600 to around 22,500…<\/p><\/blockquote>\n

The FPA says that over the 2019-20 financial year, the number of financial planners from which this budget must be recovered has fallen from around 25,600 to around 22,500 – a loss of 3,100.<\/p>\n

\u201cAs a first step in addressing these twin challenges of predictability and dramatic levy increases the Government should undertake to review the ASIC industry levy,\u201d De Gori states.<\/p>\n

He says the review should consider whether the current method of recovering the entirety of ASIC costs relating to financial advice through the levy is appropriate, particularly given that much of the additional cost being recovered relates to specific enforcement action against a small number of financial services businesses.<\/p>\n

\u201cIt should also consider whether the operation of the levy, and in particular its unpredictable increases, is having a negative impact on competition and the viability of financial planning businesses.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The FPA has called for a review of the “unsustainable” ASIC levy as the regulator seeks guidance on affordable advice. (Also see: AFA Escalates Concerns on ‘Excessive’ ASIC Funding Levy Increase). A statement from the FPA says it has made six recommendations in its Budget Submission 2021-22 aimed at addressing the rapidly increasing cost of […]<\/p>\n","protected":false},"author":24,"featured_media":54100,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,3],"tags":[],"class_list":["post-54097","post","type-post","status-publish","format-standard","has-post-thumbnail","category-compliance-regulation","category-general"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/54097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=54097"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/54097\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/54100"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=54097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=54097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=54097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}