“The relief will see ASIC levies charged for personal advice to retail clients restored to their 2018–19 level of $1,142 per adviser for the next two years (relating to 2020–21 and 2021–22). The flat per-licensee charge will remain at $1,500,” Superannuation and Financial Services Minister Jane Hume said.

“This represents a substantial reduction relative to the level estimated in ASIC’s 2020–21 Cost Recovery Implementation Statement of $3,138 per adviser. The sub-sector as a whole will pay an estimated $46 million less in ASIC levies in 2020–21 alone, with further savings flowing in 2021–22.”

Ms Hume said the freeze in the per-adviser levy will provide financial advisers with the certainty they need over the next two years to deal with the impacts of COVID-19 and further regulatory reforms making their way through the Parliament, including the introduction of a single disciplinary body and a compensation scheme of last resort.

The Treasury will also review the ASIC industry funding model while this temporary relief is in place, to ensure it remains fit for purpose in the longer term given structural changes taking place in the advice industry.

This review will commence in 2022 and will be undertaken in consultation with the Department of Finance and ASIC. 

SMSF Association CEO John Maroney said the freeze in the per adviser levy will provide advisers with much needed certainty and breathing space at a time when the advice industry is not only dealing with the impact of COVID-19 but is facing long-term structural change with the introduction of a Single Disciplinary Body and a Compensation Scheme of Last Resort currently before the Parliament.

“Significantly, the Government has also signalled it will review the ASIC Industry Funding Model, an initiative we have been calling for almost since the inception of the levy under the Australian Government Cost Recovery Guidelines," he said.

“We strongly believe that the recent increases in the ASIC levy are unsustainable and are being unfairly borne by the current population of financial advisers.

“When the levy was introduced, there were 26,000 financial advisers, a figure that has fallen to nearly 19,000. Consequently, the cost per adviser has been rising exponentially.

“It’s also worth noting that a large portion of individual financial advisers work in small and medium-sized businesses and don’t have capacity to absorb large and unpredictable increases in costs. So, these costs are ultimately borne by consumers, making financial advice even more unaffordable.”

The Financial Planning Association of Australia (FPA) welcomed the government’s announcement, noting the news “will provide some certainty and stability to financial planners”.

“This is a significant milestone for the FPA and our members, as we have been calling for a review of the flawed model since it was first proposed and then introduced three years ago. We would like to thank the government for listening to our concerns and those of our members,” said FPA chief executive Dante De Gori CFP.

National president of the Association of Financial Advisers (AFA), Michael Nowak, called the relief well timed.

“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.

“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.” He added that a lot remains to be done to ensure financial advice can still be delivered in an efficient and cost-effective manner.

However, accounting bodies CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants said that while they were grateful for the temporary ASIC fee relief for financial advisers, there remains a question why other parts of the accounting profession, which have also been hit by steep fee increases, have been ignored.

“CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants are urging the government to extend this relief to all financial services participants, not just financial advisers,” the accounting bodies said.

“This will provide widespread regulatory certainty while the profession awaits the review of the ASIC industry funding model, also announced today.

“ASIC fees for financial advisers have increased by more than 230 per cent over the past three years. Most financial advisers are sole traders or small businesses and cannot afford these rising costs. The total number of financial advisers now sits at just over 19,000, a loss of more than 2,000 since November 2020.

“Restoring ASIC fees to their 2018–19 level for the next two years comes as welcome relief for financial advisers. This decision will directly improve business viability and adviser retention rates. These are issues which also severely impact other financial services participants.

“Today’s announcement recognises the debilitating impact that ASIC industry fees are having on the profession and acknowledges the government’s role in controlling fee increases. It doesn’t make sense to discriminate between participants by granting relief to some while ignoring others.”