ASIC levy to soar for new financial year
ASIC has released its cost recovery implementation statement for the 2020–21 financial year, revealing that the costs allocated by ASIC to the advice sector have increased by more than $16 million.
ASIC has published its draft Cost Recovery Implementation Statement (CRIS) for 2020–21. The CRIS outlines ASIC’s estimated regulatory costs for 2020–21 and how these will be recovered as industry levies under the industry funding model.
The report revealed that around $72.2 million would be payable by the advice sector. This increases from $56.2 million charged by ASIC to the sector last year, when levies rose to $2,400 per adviser.
The regulator said of the total costs charged to the advice industry, $55 million would come from the cost recovery levy and $16 million from the statutory levy, which covered issues such as financial literacy education.
Of the $55 million, $16 million came from enforcement, $8 million from supervision and surveillance, and $22 million from indirect costs including governance, property and IT support.
A further $600,000 was to be charged for further recovery of last year’s costs, indicating expenses charged to the sector may have exceeded even ASIC’s final estimates for the year, which were 60 per cent above what was outlined at the end of FY20.
The number of entities included 2,991 AFS licensees with 21,308 advisers.
Licensees will have to pay a minimum levy of $1,500, and a $3,138 graduated levy based on each AFS licensee’s share of the total number of advisers registered on the financial advisers register at the end of the financial year. This would amount to $4,638 per adviser.
This comes as the corporate regulator has suggested that supervisory costs allocated to the advice industry could balloon out further, as it is forced to divert resources from other departments to deal with a potentially wide scope of matters related to the new disciplinary body.
Numerous industry bodies have called for the levy to be capped or for the recovery model to be amended, with the advice sector already under immense cost pressure due to successive waves of regulatory change following the royal commission.
Tony Zhang
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.
