financial services

282% ASIC levy increase for financial advisers

2 min read

28/06/23 22:22

The new ASIC fee levy estimates are out for 2022-23 and advisers won't be happy

Timage ASIC Levl

For most, fees will increase following the announcement by the Minister for Financial Services Stephen Jones in June that the temporary levy relief would not be extended. The freeze saw the per adviser levy component capped at the 2018-19 level of $1,142 for 2020–21 and 2021–22. It has now risen by 282% to $3,217 per adviser for 2022-23.

Final levies are published in December 2023 and invoiced between January and March 2024.

See: Cost recovery implementation statement 2022-23

Stewart Chandler from AFSL Compliance provides the following example for a licensee with two advisers providing advice on risk insurance and securities:

Levy applies to:		2021-22	2022-23
AFSL	Per licence	$1,500	$1,500
Risk Insurance authorisation	Per licence	$907	$786
Securities authorisation	Per licence	$1,000	$1,000
Securities authorisation	variable	$14.64 per $1m	$9.03 per $1m
Adviser Levy – Adviser 1	Per adviser	$1,142	$3,217
Adviser Levy – Adviser 2	Per adviser	$1,142	$3,217
Total		$5,691	$9,720

Chandler says that licensees with an MDA issue authorisation pay an additional levy. Some good news for them as this falls from $7,720 to $1,453 per licensee.

Where is the money spent?

If you are curious, like we were, here’s how it breaks down.

ASIC’s estimated costs for financial services in 2022-23 is $55.523m. The Government says that costs have escalated with an increased regulatory focus by ASIC and with structural changes in light of the Financial Services Royal Commission.

Almost 50% of the estimated cost is enforcement, supervision and surveillance.

Supervision and surveillance, enforcement	$27.74m	50.0%
Industry engagement, education, policy etc	$2.41m	4.3%
Governance, central strategy and legal	$7.32m	13.2%
Operations, IT, property and corporate services	$16.54m	29.8%
Capex	$3.58m	6.4%
Costs funded by ASIC revenue	($2.07)m

ASIC based the levy on 2,655 AFS licensees (2,655 x 1,500 = $3.983m), with the remaining $54.541m divided equally among 16,019 advisers.

The levy metric is based on the number of relevant providers that are:

registered on the financial advisers register at the end of financial year; and
authorised to provide personal advice to retail clients on behalf of the entity.

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.