Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Regulator flags drop in Supervisory Levy
After five years of compounding compliance and regulatory requirements combined with higher costs in every part of their business there are a number of potentially positive catalysts on the horizon.
The first, is of course, the Quality of Advice Review, which is occurring alongside a new Minister for Financial Services, in Stephen Jones, who has indicated a commitment to reducing the burden of regulation on the sector. These are occurring at the same time that the ALRC is reconsidering the very nature of the Corporations Act and it’s regulatory position.
The latest piece of positive news came from ASIC, the chief regulator of the industry, which has flagged a pause on the recent trend of ever-increasing Supervisory Levy costs. For the 2021-22 year, they are expecting the cost of both regulation and supervision to fall from $25.8 to $24 million.
The result is that the 2,759 licensees in Australia will once again be paying a $1,500 levy, in line with the 2018-19 financial year. Similarly, the per adviser levy will be $1,142 per adviser, the same level as well. For those who only provide general advice, the levy will be $486 while the costs for insurers are set to increase.
ASIC has estimated a jump in costs from $24.6 to $29.4 million, with $4 million of that figure to be put towards enforcement and $3 million to supervision. Final levies will be published in December 2022 and invoiced in the first quarter.
