The Financial Planning Association (FPA) has again warned that advisers are struggling under the weight of rising compliance costs, forcing them to charge higher fees in order to remain in the profession.

The FPA sounded the warning in a pre-budget submission to Treasury, urging the Government to consider the cost of regulatory compliance when evaluating options for reforms in the financial services industry.

It also suggests that the Australian Securities and Investments Commission (ASIC) monitor the operation of the profession indemnity (PI) insurance market and explore ways to curb the rising premium cost of acquiring PI cover.

The FPA says since the start of the year expenses for financial planners have continued to rise, including through direct government charges, levies and “the indirect cost of compliance”.

Estimates provided by ASIC show financial planners have seen a 68% increase in payments to its industry levy over the two years from 2017 to 2018.

“While ASIC has provided some justification for these increases in the form of a bigger work program, the rate of increase in the industry levy is fundamentally unsustainable,” the FPA said.

“Rising costs like these will continue to impact the sustainability of financial planning businesses and, as these costs are passed on to clients through advice fees, they will continue to push financial advice out of reach for many Australians.”