ASIC levy reduction ‘a welcome relief to all’ in advice industry

On Monday last week (6 May), the corporate regulator’s draft CRIS predicted that the cost of regulating licenses that provide personal advice to retail clients on relevant financial products would drop from $25.8 million in 2020-21 to $24 million in 2021-22.

The estimated cost covers 2,759 AFS licensees and 17,402 financial advisers, while a minimum levy of $1,500 is expected, plus $1,142 per adviser.

“It is pleasing to see reports that the regulator expects to see a reduction in the cost of regulating licenses, which you would hope and expect given the reduction in overall adviser numbers,” Mr Kapetanovic said.

“Advisers are already under significant pressure to provide advice to clients at an affordable level, so the reduction in cost to $1,500 plus $1,142 per adviser is a welcome relief to all in the industry and opens the gateway for advisers to focus a new world post-Hayne royal commission and pandemic.”

The CRIS also read that regulating licensees providing advice on products that are not relevant financial products is also expected to be slashed from $189,817 to $65,575.

For licensees that provide general advice only, ASIC predicted that the regulation cost would be $505,467, down from $602,613 in 2020-21.

Mr Kapetanovic added: “The current pause on increases and further reductions, speaks to the significant changes occurring in the industry, including the overall quality of participants and need for better end-to-end client experiences.

“This provides a great step in the right direction for advisers especially those independent planners who are committed to grow and take advantage of the new opportunities arising.”

Final levies will be published by ASIC in December 2022 and invoiced between January and March 2023.

Feedback on the draft CRIS can be submitted until 28 June 2022.