Life Insurance Online :: News
SHARE

Share this news item!

Advisers' Levy Driven by New Compliance Costs

Advisers' Levy Driven by New Compliance Costs

Advisers' Levy Driven by New Compliance Costs?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Financial advisers in Australia are finding themselves under increased financial pressure as the Australian Securities and Investments Commission (ASIC) seeks to raise additional funds through heightened levies for the 2023-24 fiscal year.
A substantial part of this increase is attributed to the establishment of new regulatory frameworks and compliance measures.

The bulk of the additional levy is directed towards the funding of the Compensation Scheme of Last Resort (CSLR), a mechanism aimed to ensure consumers receive compensation owed by financial firms that have failed. Additionally, costs related to the adviser exam and the creation of a single disciplinary body for advisors add to the financial burden.

Further driving up costs is ASIC’s oversight activities regarding choice superannuation products. This has raised eyebrows within the financial advisory community as to why advisers should bear this specific administrative cost, which arguably involves superannuation funds as a key component of the equation.

ASIC has broken down these costs, itemizing the components being billed to advisors. This includes:

  • CSLR implementation
  • Choice superannuation products oversight
  • Adviser examination and registration
  • Compliance for SMSF (Self-Managed Super Funds) establishment advice
  • The newly structured single disciplinary body system

Moreover, financial advisers will share additional regulatory costs with other financial advice sub-sectors. These costs encompass several areas including ASIC’s cyber resilience initiatives, breach reporting mechanisms, the employment of artificial intelligence, dispute resolution processes, penalties for the non-lodgement of financial reports, enforcement against unlicensed financial advice, and restrictions on cold-calling for superannuation switching.

Critics argue that the levy structure places an undue financial load on advisers for areas where other stakeholders, such as superannuation funds and accountants, significantly contribute and should possibly share responsibility. For example, the costs associated with SMSF establishment advice compliance are shared more equitably between accountants and advisers, reflecting their respective roles.

On a positive note, costs associated with combating unlicensed financial advice and cold-calling superannuation switching will be distributed across all financial advisory sub-sectors rather than being shouldered solely by individual advisers.

Financial advisers looking to understand the reasoning behind their increased ASIC levy can refer to the detailed breakdown provided by ASIC. According to ASIC's figures, the overall regulation cost for the financial advice sector for 2022-23 sat at $47.6 million, which is poised to rise to $48.4 million in 2023-24.

The need for these measures, while increasing costs in the short term, is part of an effort to create a more robust and fairer financial advisory industry, aiming to benefit consumers and professionals alike by ensuring higher standards and better protection mechanisms.

Source: ASIC Bulletin

Published:Wednesday, 10th Jul 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Navigating Rising Premiums: Challenges for Australian Insurers
Navigating Rising Premiums: Challenges for Australian Insurers
07 May 2026: Paige Estritori
The Australian insurance sector is currently confronting significant challenges, with premium affordability emerging as a primary concern. This issue has ascended to the forefront, surpassing other pressing matters such as cyber risks and workforce shortages. The escalation in premiums is largely attributed to a combination of rising inflation, increased climate-related losses, and stringent regulatory pressures. - read more
ACCC Halts IAG's Bid to Acquire RAC Insurance
ACCC Halts IAG's Bid to Acquire RAC Insurance
07 May 2026: Paige Estritori
The Australian Competition and Consumer Commission (ACCC) has recently intervened to block Insurance Australia Group's (IAG) proposed acquisition of RAC Insurance. This decision underscores the regulator's commitment to maintaining competitive dynamics within the Australian insurance market. - read more
Australian Insurers Respond to Cost Increases Amid Middle East Conflict
Australian Insurers Respond to Cost Increases Amid Middle East Conflict
07 May 2026: Paige Estritori
The ongoing conflict in the Middle East has had far-reaching economic repercussions, including significant impacts on the Australian insurance industry. Insurers are now grappling with rising costs due to disrupted supply chains, increased fuel prices, and heightened material expenses. In response, the Insurance Council of Australia (ICA) has initiated measures to support customers during this challenging period. - read more
Hostplus and MetLife Australia Strengthen Ties with Extended Partnership
Hostplus and MetLife Australia Strengthen Ties with Extended Partnership
07 May 2026: Paige Estritori
Hostplus, a prominent Australian superannuation fund, has announced the extension of its group insurance partnership with MetLife Australia until June 2028. This collaboration, which began in 2013, aims to provide comprehensive insurance coverage to Hostplus members, including Death, Total and Permanent Disablement (TPD), and Income Protection insurance. - read more
APRA and ASIC Publish December 2025 Life Insurance Claims and Disputes Data
APRA and ASIC Publish December 2025 Life Insurance Claims and Disputes Data
07 May 2026: Paige Estritori
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have jointly released the Life Insurance Claims and Disputes Statistics publication, covering the period from January 1, 2025, to December 31, 2025. This comprehensive report offers valuable insights into the performance of the Australian life insurance industry over the past year. - read more


Life Insurance Articles

The Impact of Hobbies and High-Risk Activities on Life Insurance Costs
The Impact of Hobbies and High-Risk Activities on Life Insurance Costs
Life insurance is an essential financial protection that provides peace of mind to policyholders and their loved ones. The premiums you pay are determined by various factors, including age, health, lifestyle, and occupation. - read more
Covering the Unexpected: A Guide to Trauma Insurance for Australian Families
Covering the Unexpected: A Guide to Trauma Insurance for Australian Families
Trauma insurance, also known as critical illness insurance, is a type of coverage that provides a lump sum payment in the event that the insured suffers from a critical illness or injury. Unlike health insurance, which covers medical expenses, trauma insurance is designed to provide financial protection by helping to cover the additional costs associated with recovery from a severe illness or injury. - read more
Life Insurance for Entrepreneurs: Protecting Your Business and Family
Life Insurance for Entrepreneurs: Protecting Your Business and Family
Life insurance is a financial product designed to provide a safety net for your loved ones and business in the event of your passing. At its core, life insurance aims to deliver financial protection by paying out a lump sum or ongoing payments to a designated beneficiary upon the insured's death. - read more
Understanding Various Life Insurance Types: Which One is Right for You?
Understanding Various Life Insurance Types: Which One is Right for You?
Financial security is one of the most important aspects of modern family life. Ensuring that loved ones are protected and well-supported in the event of an untimely death is a fundamental concern for many Australians. - read more
Understanding Life Insurance Needs: A Guide for Australian Families
Understanding Life Insurance Needs: A Guide for Australian Families
Life insurance is a financial product designed to provide peace of mind by offering a safety net for your loved ones in the event of your passing. The primary purpose of life insurance is to ensure that your family is financially protected, allowing them to maintain their standard of living even without your income. - read more

Knowledgebase
Reinsurance:
Insurance that an insurance company purchases from another insurance company to mitigate risk.