SYDNEY: 30 August 2021 – The Association of Financial Advisers (AFA)’s advocacy on behalf of its members has helped win a major concession from the Government, with the proposed trebling of the ASIC Funding Levy (the ASIC Levy) on hold, AFA National President Michael Nowak announced today.
“The proposed increase would have seen the ASIC Funding Levy per financial adviser increase by 200% in just over two years, from $1,142 in 2018/19 to an estimated $3,450 in 2020/21,” he said.
Mr Nowak said that in response to extreme concerns raised by the AFA and the advice sector about the impact of the increases, the Government has decided to reduce the ASIC Levy back to the 2018/19 level of $1,142 per adviser for the next two years, in the face of further Hayne Royal Commission recommendations being implemented.
During this time the Government has announced it will also be undertaking a review of the ASIC industry funding model to ensure that it remains fit-for-purpose.
“This is a much-needed move in the right direction, and I want to thank the Treasurer The Hon. Josh Frydenberg, MP and the Minister for Superannuation, Financial Services and the Digital Economy the Hon. Jane Hume and the Government for finally listening to the AFA and the advice sector,” Mr Nowak said.
“The financial advisers the AFA represents are dealing with a requirement to sit a compulsory FASEA Exam and meet other education standards to keep their livelihood, on top of an overwhelming volume of other regulatory reform, huge sectoral restructuring and the impact of the COVID-19 crisis.
“It was unjustifiable to expect advisers already dealing with this tsunami of reforms to have to find extra cash to fund a trebling of the levy over two years to support an industry funding model requiring small businesses to pick up the cost of litigation against large institutions.
“This is a significant first step in starting to address the practical impact of the reforms on the ability of financial advisers to offer everyday Australians sound financial advice to give them financial security and independence.
“There is much more to be done to ensure that post the reforms financial advice can still be delivered in an efficient and cost-effective manner, thereby ensuring that it is available to the majority of Australians.
“The ASIC Funding Levy has been the subject of intense discussion at Parliamentary hearings throughout the course of 2021, and we thank all those politicians who have picked up this cause and lobbied on behalf of the financial advice profession.”
At the Parliamentary Joint Committee on Corporations and Financial Services hearing with ASIC on Friday 27 August 2021, the ASIC Funding Levy was the subject of discussion for the first 50 minutes, with probing questions from a number of the committee members. The AFA thanks Andrew Wallace (LNP Qld), Bert van Manen (LNP Qld), Senator Deborah O’Neill (ALP NSW) and Steve Georganas (ALP SA) for their passionate pursuit of this matter.
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About the AFA
The Association of Financial Advisers Limited (AFA) has been the authentic voice on the value of financial advice for 75 years. Today, the AFA is a vibrant, innovative association, where the underlying driver of policy is the belief that great advice transforms lives. To this end the AFA is striving to achieve the vision of Great Advice for More Australians. The AFA’s ongoing relevance as a professional association is derived from its success in engaging with the major stakeholders in financial advice including advisers, consumers, licensees, product and service providers, and the regulator and government. Culturally the AFA believes in the value of collaboration to create powerful outcomes and this drives how we achieve influence and work towards our vision.