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ASIC industry funding levy formula 'not equitable': planners

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Financial advisers and planners are concerned about the estimated levy the industry will pay to support the corporate regulator’s supervision work in the 2020/21 financial year.

The Financial Planning Association (FPA) says the estimates from the Australian Securities and Investments Commission (ASIC) supports the peak body’s position that the current formula for calculating the levy is “not equitable or sustainable”.

ASIC released its Cost Recovery Implementation Statement last week, estimating it will collect about $72.246 million in overall levy from the financial advice sector. About $54.281 million will come from cost recovery levies and the other $17.965 million from statutory levies.

FPA says the levy formula needs to be reviewed or more financial planning practices, already struggling under a weight of regulatory reform costs, will be forced to close.

It says the ASIC estimate points to a further 31% increase from the previous financial year.

“The ASIC industry levy for financial planners has gone up over 340% in the last four years and is on an unsustainable trajectory,” FPA said.

“As a first step in addressing these challenges of [unpredictability] and dramatic levy increases, we call for the government to urgently and immediately undertake a review of the ASIC industry levy.

“It has been four years since the levy was first introduced, and it is now critical to review its implementation and impact on the financial services sector.”

FPA says the increases over the last few years have come as the number of registered financial planners in Australia continues to decline.

Click here for the ASIC recovery statement.