Advisers' Levy Driven by New Compliance Costs
Advisers' Levy Driven by New Compliance Costs
The bulk of the additional levy is directed towards the funding of the Compensation Scheme of Last Resort (CSLR), a mechanism aimed to ensure consumers receive compensation owed by financial firms that have failed. Additionally, costs related to the adviser exam and the creation of a single disciplinary body for advisors add to the financial burden.
Further driving up costs is ASIC’s oversight activities regarding choice superannuation products. This has raised eyebrows within the financial advisory community as to why advisers should bear this specific administrative cost, which arguably involves superannuation funds as a key component of the equation.
ASIC has broken down these costs, itemizing the components being billed to advisors. This includes:
- CSLR implementation
- Choice superannuation products oversight
- Adviser examination and registration
- Compliance for SMSF (Self-Managed Super Funds) establishment advice
- The newly structured single disciplinary body system
Moreover, financial advisers will share additional regulatory costs with other financial advice sub-sectors. These costs encompass several areas including ASIC’s cyber resilience initiatives, breach reporting mechanisms, the employment of artificial intelligence, dispute resolution processes, penalties for the non-lodgement of financial reports, enforcement against unlicensed financial advice, and restrictions on cold-calling for superannuation switching.
Critics argue that the levy structure places an undue financial load on advisers for areas where other stakeholders, such as superannuation funds and accountants, significantly contribute and should possibly share responsibility. For example, the costs associated with SMSF establishment advice compliance are shared more equitably between accountants and advisers, reflecting their respective roles.
On a positive note, costs associated with combating unlicensed financial advice and cold-calling superannuation switching will be distributed across all financial advisory sub-sectors rather than being shouldered solely by individual advisers.
Financial advisers looking to understand the reasoning behind their increased ASIC levy can refer to the detailed breakdown provided by ASIC. According to ASIC's figures, the overall regulation cost for the financial advice sector for 2022-23 sat at $47.6 million, which is poised to rise to $48.4 million in 2023-24.
The need for these measures, while increasing costs in the short term, is part of an effort to create a more robust and fairer financial advisory industry, aiming to benefit consumers and professionals alike by ensuring higher standards and better protection mechanisms.
Source: ASIC Bulletin
Published:Wednesday, 10th Jul 2024
Source: Paige Estritori
Share this news item:
| ATA Challenges Productivity Commission's Proposal to Double Truck Fuel Tax 01 Mar 2026: Paige Estritori The Australian Trucking Association (ATA) has expressed strong opposition to the Productivity Commission's proposal to more than double the tax on truck fuel. The plan suggests phasing out fuel tax credits for trucking operators, effectively increasing the fuel tax rate from the current 32.4 cents per litre to 66.1 cents per litre by 2035. - read more |
| PERILS Revises Loss Estimate for November 2025 Storms in Queensland and NSW 01 Mar 2026: Paige Estritori In a recent update, catastrophe data provider PERILS has increased its insurance industry loss estimate for the severe convective storms that struck Queensland and New South Wales between November 21 and 27, 2025. The revised estimate now stands at AU$2.95 billion, marking an 11% rise from the initial figure of AU$2.663 billion released in January 2026. - read more |
| Federal Court Denies Truck Driver's Insurance Claim Against Superannuation Fund 01 Mar 2026: Paige Estritori In a recent legal decision, the Federal Court dismissed a truck driver's insurance claim against the Australian Retirement Trust. The case centred on whether the driver had active insurance coverage through his superannuation account, particularly concerning the 'dangerous occupation exception.' - read more |
| AIA Australia Introduces Enhancements to Priority Protection Life Insurance 28 Feb 2026: Paige Estritori AIA Australia has announced significant updates to its Priority Protection life insurance suite, effective from 9 November 2025. These enhancements are designed to simplify discounts, improve policy clarity, and support premium affordability for policyholders. - read more |
| Understanding the Tax Benefits of Income Protection Insurance in Australia When hardship hits and earning a steady income becomes a challenge due to illness or injury, income protection insurance steps in as a crucial lifeline. This insurance acts much like a monetary buffer, providing you with a percentage of your regular income during times when you're unable to work. It's designed to offer peace of mind and stability, not just for you, but also for your dependents who rely on your financial support. - read more
|
| Why Income Protection Insurance Is Essential for Australians Income protection insurance is a type of personal insurance that provides financial support if you are unable to work due to illness or injury. It ensures that you continue to receive a portion of your income, helping you manage daily expenses and financial commitments during recovery. - read more
|
| Understanding Life Insurance: How to Get the Best Online Quotes The digital age has fundamentally transformed how we approach almost every aspect of our lives, including the way we shop for life insurance in Australia. Gone are the days when one had to schedule meetings with insurance agents or flip through pamphlets to understand life insurance policies. Today, obtaining life insurance quotes online has become the norm, offering a hassle-free and incredibly accessible platform for individuals to safeguard their financial future. - read more
|
| The Role of Health Insurance in Supporting Preventive Care Preventive healthcare refers to measures taken to prevent diseases, rather than treating them after they occur. This includes actions like regular health screenings, vaccinations, and adopting healthy lifestyle practices. - read more
|
The time period between an injury and the receipt of benefit payments from an insurer, particularly in disability insurance.