How much will advisers pay in the 2022–23 levy?
The Australian Securities and Investments Commission has released the indicative levy for advisers in 2022–23 in its latest cost recovery implementation statement.
The regulator explained licensees that provided personal advice to retail clients on relevant financial products will have a minimum levy of $1,500, plus $3,217 per adviser.
The previous year, the figure had stood at $1,142 per adviser.
The levy metric is based on the number of relevant providers (within the meaning of s910A of the Corporations Act) on the Financial Advisers Register (FAR). A licensee will only pay the levy in proportion to the number of days in the financial year that they held the relevant AFS licence authorisation.
There are around 2,655 AFS licensees in this category with 16,019 advisers and ASIC’s estimated cost recovery amount is $55.5 million.
For licensees that provide general advice only, of which ASIC estimated some 1,061 entities, the estimated levy is $2,635 with an estimated cost recovery amount of $2.7 million.
A flat levy, the subsector regulatory costs will be shared equally between all entities in the subsector as ASIC’s regulatory costs for each entity are not dependent on each entity’s share of total business activity within the subsector, it explained.
Licensees that provide personal advice to wholesale clients only will see a flat levy of $18, for the aforementioned reason.
Total regulatory costs to be recovered via industry funding levies by ASIC is $352.040 million, of which the financial advice subsector comprises $58.418 million.
In comparison, the figures were $332.266 million and $68.234 million in 2021–22 respectively.
Earlier this week, a Treasury review confirmed ASIC will not be extending the temporary freeze on levies for financial advisers.
A temporary levy relief was provided to personal financial advice licensees for 2020–21 and 2021–22 in recognition of the higher levies incurred by this sector but this will not be extended further, Jones said.
This saw the per adviser levy component capped at the 2018–19 level of $1,142, and the cost of this relief was borne by the government and not recovered through levies charged to other sectors.
AUTHOR
Rhea Nath
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I'm ok with paying a reasonable amount of levy but this is not at all reasonable.
A small licensee with 6 advisers will pay $20k in levies and total licensing costs including software of over $100k per year. And that's assuming a perfect record of no complaints ever. Get 1 complaint and you can add another $20-30k onto that.
So much for wanting advice to be more affordable.
So my practice fees have roughly doubled. 1 Licence and 5 advisers, up from circa 9k to $17,585.
Other than there being less advisers to spread the cost on - what do we get for this? Clearly more advisers will leave due to increases. So we either add to inflation by dialling up what we charge clients or we leave the industry at which point costs will be further concentrated on the remaining few. There will be less advisers to serve an underserved public and financial advice becomes even more unaffordable.
We are in the midst of a death spiral as an industry.
As a part-time self-employed financial adviser paying around $13K pa fee to be an authorised representative of an AFSL, a $3,217 ASIC levy when I have (so far) no paying clients seems a bit of a bad joke. And they wonder why adviser numbers are dropping off and average Australians can't afford professional personal financial advice...
Costs go up - prices go up!!
Not that hard for Jones to understand… is it???
Simple solution......pass the increased ASIC costs onto clients.
It is tragic that our profession is plundered by third parties. Govt $4,717 + PI $thousands + Licensee $thousands + tech $thousands. No wonder heaps of people don't want to pay high advice fees. QOAR changes over the next 12 months will do bugger all for cost and no one is dropping their fees.