Is your business ready for the ASIC funding deadline?

Alex Burke,  Senior Writer,  No More Practice Education

The new information deadline for the ASIC industry funding regime is approaching in less than a month - how much will you pay, and have you submitted your information?

The regime kicked in on 1 July 2017 and has been aimed at giving ASIC the facility to recoup the costs of surveilling the companies within its regulatory remit. Depending on its structure (and size), each company will pay an indicative flat levy along with a graduated component as appropriate.

What are the levies for advice groups?

There are four "brackets" for advice firms. The largest bracket, representing 2,953 entities as at 28 March 2018, are "licensees that provide personal advice to retail clients on relevant financial products." These licensees will collectively pay about $26 million; indicative levies for each are $1,500.

Graduated levies will also apply to this group, but ASIC said there isn't sufficient data yet to estimate them.

The next-largest group comprises "licensees that provide personal advice to wholesale clients only," representing 1,466 constituents and $874,000 in recoupable costs. Each business will pay a flat levy of $596 with no graduated component.

Read more: ASIC's intervention powers are expanding: here's what it means

Representing 983 entities, "licensees that provide general advice only" will collectively pay about $2 million with a flat levy of $2,058 estimated for each and no graduated component.

Finally, the 660 "licensees that provide personal advice to retail clients on products that are not relevant financial products" will collectively pay $462,000 and an estimated levy of $719 each, determined by number of days authorised. Once again, no graduated component applies.

If your licensee is authorised to provide managed discretionary account (MDA) services, a flat levy of $1,346 will also apply.

What do I need to do?

As you will have noticed above, some of these groups will pay a graduated levy, and their indicative levy will also be determined by certain business metrics. ASIC will need information about your advice business in order to provide exact figures for the past financial year.

If this information hasn't been provided, it will need to be submitted by September 27. ASIC has a step-by-step process available here.

As ASIC commissioner Cathie Armour has explained, “Complying with industry funding obligations is simple and we have set up an online process to make it straightforward. As this is the first year of an entirely new funding model for industry, our focus is on ensuring people know what they need to do in advance.”

Given the wide-ranging implications that the new industry funding regime will have on Australia’s financial services industry, it’s worth being as prepared as possible.


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.

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Neil Pace Pace

30/08/18

You shouldn't believe ASIC's view that complying with the industry funding model is simple. we cannot lodge our business metrics for our audit firm as their systems don;t recognise us. Have been following them up for over a month now and they just keep saying they will send a letter out soon! this rubs salt into the wound when you consider that the model has been poorly thought out by government and poorly implemented by ASIC. its a ludicrous situation we face whereby ASIC can;t tell us what our levy will be over 18 months since the model took effect!

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