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.
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.
HESTA, a prominent Australian superannuation fund, has unveiled a series of changes aimed at providing more accessible and affordable insurance coverage for its members. Effective from 1 July 2026, these adjustments include an average 12% reduction in insurance fees across all cover types, encompassing death, total and permanent disablement (TPD), and income protection cover. - read more
Acenda Life has recently implemented a series of updates to its Retail Life Insurance portfolio, effective from 11 April 2026. These changes are designed to provide greater flexibility and accessibility for Australians seeking income protection insurance, addressing common concerns about policy limitations and entry age restrictions. - read more
The Australian Financial Complaints Authority (AFCA) has recently ruled in favour of Nippon Life Insurance in a dispute concerning income protection (IP) offsets, confirming an overpayment of nearly $18,000 and supporting the insurer's decision to suspend benefits during the reconciliation of compulsory third party (CTP) income. - read more
The Australian tattoo industry is currently grappling with prohibitively high insurance premiums, a situation largely attributed to a lack of competition within the insurance market. The Australian Tattooists Guild has highlighted that the dominance of a single broker and underwriter has resulted in a near-monopoly, leaving tattoo businesses with few alternatives for affordable coverage. - read more
Australian small businesses, including beauty salons, are confronting a significant challenge: rapidly increasing insurance premiums that threaten their operational viability. A recent federal parliamentary inquiry has shed light on the severe impact these escalating costs are having on the small business sector. - read more
Life insurance serves as a crucial safety net, guarding your loved ones against the unforeseen. Just as you would take care of your health through regular check-ups, it is equally important to ensure that your life insurance policy remains in sound condition to provide the necessary protection. - read more
For many Australian families, the concept of estate planning might evoke imagery of vast wealth and complex legal documents, reserved for the very affluent. However, this misconception overshadows the universal importance of having an estate plan, which at its core, is about ensuring your loved ones are cared for and your wishes are honored upon your passing—even if you don't consider yourself wealthy. - read more
Life insurance is a financial product that provides a lump sum payment to your beneficiaries in the event of your death. It is designed to offer financial security by covering debts, daily living expenses, and future financial obligations. - read more
Life insurance might not be at the forefront of your mind, especially when you're young and healthy. However, understanding the essence of life insurance early on can significantly impact your financial future and provide much-needed peace of mind. - read more
Life insurance is one of those cornerstones of financial planning that often gets overlooked. Yet, the importance of life insurance in safeguarding your family's future cannot be overstated. It's a robust financial instrument that provides peace of mind, knowing that your loved ones will be financially secure in the event of your untimely passing. This introductory section lays the groundwork for understanding why life insurance is pivotal in your family's financial health. - read more
Knowledgebase
Proximate Cause: The primary cause of loss in an insurance claim, which sets in motion a chain of events leading to the damage or injury.
No comments yet. Be the first to share your thoughts.