In its latest Cost Recovery Implementation Statement (CRIS), published on Wednesday, ASIC confirmed that to cover the cost of regulating licensees that provide personal advice to retail clients, which stood at an estimated $55.5 million in 2022–23, advisers will pay a minimum levy of $1,500 per licensee plus $3,217 per adviser.
Responding to the announcement, SMSF Association chief executive Peter Burgess said that it is a massive increase, particularly for advisers who are self-licensed, who will also be on the hook for the $1,500 minimum levy fee charged to each licensee, for a combined cost of $4,717.
“The exodus of advisers from the sector is well documented and this latest fee increase will have a significant financial impact on those who remain in the sector under ASIC’s cost recovery model,” Mr Burgess said.
On the release of Treasury’s review of the cost recovery model on Monday, Minister for Financial Services Stephen Jones signalled the end of the temporary levy relief that had been in place since 2021 when the fee was frozen at the 2019 level of $1,142 per adviser. This was after the 2021 estimated fee reached $3,138 per adviser.
“This fee increase is a heavy blow for the advice industry, coming at a time when industry is actively consulting on the Quality of Advice Review (QAR) recommendations and working out how the advice process can be improved to make it more cost effective and accessible to more Australians,” Mr Burgess said.
He added that with many advisers operating small businesses, these kinds of fee increases are difficult to absorb.
“Particularly in the current economic climate, these cost increases are not sustainable, and we would urge ASIC and the Government to rethink this decision,” Mr Burgess said.
“What the sector needs now is a period of stability to retain existing advisers, the resolution of the QAR recommendations and a review of the education and entry pathways to ensure a healthy, sustainable sector – not a hefty fee increase.”
The association’s CEO also expressed concern for the impact of the increase on SMSF trustees.
“We are also concerned about the impact this latest levy hike will have on the small pool of accountants who have remained in the sector despite the many headwinds and what this will mean for SMSF trustees who rely on their accountants for essential SMSF and superannuation advice,” Mr Burgess said.
“As we argued in our submission to the QAR, qualified accountants have a vital role to play in filling the advice gap in the SMSF sector.”
Yes the percentage increase is staggering, but for me the biggest sting is that those who are still standing are paying ASIC’s costs to pursue those that are going. A penalty on the righteous