The AFA has labelled ASIC\u2019s industry funding levy increase for advisers as excessive and inequitable and has called for action.<\/p>\n
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.<\/p>\n
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.<\/p>\n
The history of the levy amount per adviser over the last three years was summarised by the AFA as follows:<\/p>\n
Year \u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 \u00a0 Amount \u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0Increase<\/strong><\/p>\n 2017\/18 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $934 \u00a0\u00a0\u00a0\u00a0<\/strong><\/p>\n 2018\/19 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $1,134 \u00a0\u00a0\u00a0\u00a0 \u00a0 \u00a0 21%<\/strong><\/p>\n 2019\/20 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $2,426 \u00a0\u00a0\u00a0\u00a0 \u00a0 \u00a0 114%<\/strong><\/p>\n 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.<\/p>\n \u201cBy December 2020, this figure had increased to $56.2 million, an amount that exceeded the cost of any other regulated community.”<\/span><\/p>\n The association says ASIC has not published a breakdown of the updated figure \u201c\u2026 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.\u201d<\/p>\n \u201cDisturbingly 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.\u201d<\/p>\n …this is in our view, not an equitable way to operate<\/p><\/blockquote>\n 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, \u201c\u2026however, this is in our view, not an equitable way to operate. Clearly the ASIC Funding Levy methodology needs to change\u201d.<\/p>\n The association says it has escalated this issue to all those in the Government who it can\u00a0 \u201c\u2026 however to this point the response has been little more than an acknowledgement of the issue and the problem that it has caused\u201d.<\/p>\n It says it has also escalated the issue to the Treasurer\u2019s Office:<\/p>\n \u201cWhat 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.\u201d<\/p>\n The AFA \u00a0says 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.<\/p>\n