The Financial Planning Association (FPA) wants the Australian Securities and Investments Commission (ASIC) industry levy freeze extended, saying the proposed measure will give its members “certainty” with their cost planning.

Levy fees have been frozen at 2018/19 levels, at $1142 per adviser/planner, under a two-year relief scheme introduced by the previous Coalition government. The relief applied to the 2020/21 and 2021/2022 years.

FPA says unless the freeze is extended, financial planners face the prospect of a “big” increase in levy fees for this financial year. The peak body previously estimated the levy per adviser would be about $3138 – almost three times the actual levy paid – had there not been a freeze for the last financial year.

“The Financial Planning Association of Australia is seeking an urgent extension of the ASIC industry levy freeze beyond the end of last financial year, so financial planners can have certainty in their cost planning,” the peak body said.

“The fee level has been frozen in recent years… however that freeze could be about to end.”

Treasury has commenced a review of the ASIC industry funding model, which was introduced five years ago to support the corporate regulator’s supervision work.

But FPA says “time is running out” for any changes to the model to be agreed and then implemented in time to impact the current financial year.

FPA CEO Sarah Abood says it is timely to review the funding model’s implementation and impact on the financial services sector now that the cost recovery scheme has been in operation for five years.

“Making financial advice more affordable for all Australians starts with making financial planning more affordable to practice,” Ms Abood said.

“There are activities that we’re aware ASIC undertakes that have nothing to do with financial planners yet are funded by financial planners in the current model.

“The government has had to intervene twice in the past five years because the model isn’t working as intended.”

She says it is important that any year-on-year increases “better reflect” the capacity of the financial planning profession.

Ms Abood says it is unclear whether ASIC is obligated under legislation or regulations to recover the cost of litigation and investigations relating to court action in the industry levy.

“Consideration should be given to excluding these costs from the levy where these matters are ongoing, until the litigation proceedings are complete and the matter has been determined by the court,” she said.

“This will make it clear whether ASIC has achieved a successful outcome in relation to the litigation, and therefore whether costs will or will not be recovered from the entity subject to litigation investigation and proceedings.

“This will alleviate the inequitable upward pressure on the levy paid by participants not subject to this enforcement activity.”