AFA submission on the ASIC Industry Funding Model Review

At the end of August 2021, when announcing the ASIC Funding Levy relief for financial advisers, former Treasurer Josh Frydenberg announced that there would be a review of the ASIC Industry Funding Model.  That review is finally underway.

Treasury issued a consultation paper in late September.  The AFA made a submission in response to this consultation paper on 28 October 2022.  The ASIC Funding Levy has been a hot issue for us over the last few years, particularly as we saw a threefold increase in a few short years.  What made this worse was that it was in large part driven by enforcement activity that was directed at the large institutions, many of whom had already exited the financial advice sector.  The problem has also been compounded by the significant reduction in adviser number, which has contributed substantially to an increase in the cost per adviser.

We have also been outspoken on paying for unlicensed operators, such as Melissa Caddick, on the presumption that financial advice is the closest thing to what they were doing.  Advisers, who are licensed, should not be paying for those who are operating on an illegal basis.  How is that fair on those who do the right thing.  We have also argued against arbitrary decision making by ASIC, such as charging 60% of the costs of a High Court action that they took against Westpac owned  super funds to financial advisers, just because the High Court formed the view that the call centre operators for those super funds were providing personal advice.  We simply cannot see the logic in this.  It either should have been paid for by Westpac or the super funds, but certainly not by small business financial advisers.

Senator Susan McDonald, a Queensland National, asked ASIC a question at Senate Estimates on 9 November 2022, as to whether ASIC would be reducing the size of their financial adviser team in the context of the significant decline in adviser numbers and the increase in professional standards.  The answer was that the cost increase was driven by enforcement activity that is now largely complete, however they would not be reducing their financial adviser team as work has emerged in other areas such as the Single Disciplinary Body (FSCP).

We are very conscious that the relief that was provided to financial advisers by the former Government, that we estimate amounted to around $30m per year, has already expired as of the end of the 2021/22 year.  That means that in the current year of 2022/23, advisers will be exposed to the actual sped by ASIC, which could be substantially higher.  That is why we want this issue to be addressed before the end of the current financial year.

Please click here for a copy of the AFA submission.

For any questions on the AFA submission, please email