Menu
Menu
The Financial Planning Association of Australia (FPA) is seeking an urgent extension of the ASIC industry levy freeze beyond the end of last financial year, so financial planners can have certainty in their cost planning.
The 2022-23 financial year could potentially see a big increase in the ASIC fees paid by financial planners. The fee level has been frozen in recent years (at the 2018-19 level of $1,142 per adviser), however that freeze could be about to end.
A Treasury-led review of the ASIC industry funding model has recently been announced. However time is running out, according to the FPA, for any changes to the model to be agreed and then implemented in time to impact the current financial year.
In a recent submission to ASIC, FPA Chief Executive Officer, Sarah Abood, says that it has been five years since the levy was first introduced, and it is timely to review its implementation and impact on the financial services sector.
“Making financial advice more affordable for all Australians starts with making financial planning more affordable to practice,” Abood says.
“There are activities that we’re aware ASIC undertakes that have nothing to do with financial planners yet are funded by financial planners in the current model. The government has had to intervene twice in the past five years because the model isn’t working as intended.”
“It is important that any year-on-year increases better reflect the capacity of the financial planning profession.” she says.
The FPA also recommends the creation and application of retrospective regulations to cordon off and charge the six large licensees at the time (AMP, Macquarie, ANZ, CBA, NAB and Westpac) directly under a separate and specific levy for the cost of ASIC’s ongoing oversight of their remediation programs and litigation.
Abood says it is unclear whether ASIC is obligated under legislation or regulations to recover the cost of litigation and investigations relating to court action in the industry levy.
“Consideration should be given to excluding these costs from the levy where these matters are ongoing, until the litigation proceedings are complete and the matter has been determined by the court,” she says.
“This will make it clear whether ASIC has achieved a successful outcome in relation to the litigation, and therefore whether costs will or will not be recovered from the entity subject to litigation investigation and proceedings.
“This will alleviate the inequitable upward pressure on the levy paid by participants not subject to this enforcement activity.”