6 December 2018
ASIC has published its regulatory costs for the 2017-18 financial year, as part of the government’s industry funding arrangements that became law in 2017.
Consequently, ASIC has calculated annual levies payable by industry (PDF) to recover these costs, which for some sectors represent significant increases in costs payable in an environment where compliance and business costs continue to rise
CPA Australia has significant concerns around this funding model, and will be seeking to further engage with ASIC and the government to raise issues such as accountability and implementation, as well as the negative effect it may have on sectors that ASIC regulates.
In addition to the new application fees to apply for an Australian Financial Services (AFS) licence which are now between $2233 and $5025, each AFS licensee that provides personal advice to retail clients on relevant financial products will now pay a minimum annual levy of $1500 plus $934 per adviser.
This means the annual cost for a sole practitioner will be more than $2400, which is a significant disincentive to continue providing financial advice – even before the regulatory and time costs to come are considered, such as the professional standards reforms (FASEA), which commence 1 January 2019.
Further, for registered liquidators, the annual fee payable to ASIC will be $2500 plus $77 per appointment and notifiable event; while for registered company auditors, the annual fee is $209, although there are several other one-off fees that company auditors face. For SMSF auditors, there is no annual fee payable to ASIC.
CPA Australia is deeply concerned that the increasing regulatory burden on public practitioners will further affect accessibility to quality advice through increased costs and less supply.
In the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry where the major banks are divesting themselves from their wealth business, this is a poor outcome for the broader community.
We encourage you to share with us how regulatory obligation such as the new ASIC funding model may be affecting your practice, or to send any questions you have to [email protected]