FAAA slams $5k adviser fees as crippling

The Financial Advice Association Australia has labeled the latest levy estimates from the corporate regulator as damaging for financial advisers. The association warned these expenses could force more small businesses to leave the sector.

Levies rise 31% in a year

The Australian Securities and Investments Commission set the 2025-26 industry levy at $62.6 million, a jump from $46.1 million the previous year. Higher enforcement costs drove the increase, though details on how the additional $24 million was spent remain unclear.

For licensees offering personal advice to retail clients, the levy includes a $1,500 minimum plus $3,037 per adviser. This marks a 31% increase from last year’s $2,314 and reverses a 12% decrease from the previous year.

The Compensation Scheme of Last Resort will add another levy, pushing total costs per adviser near $5,000. The scheme expects financial advice to cover $190.3 million of its $198.1 million total in 2026-27, exceeding the $20 million subsector cap.

Small practices bear the brunt of these costs. A survey revealed 70% of advisers believe the CSLR levy will speed up exits from the profession.

Calls for transparency and reform

The FAAA criticized the sharp rise in enforcement costs, noting ASIC provided no clear explanation. The association demanded better transparency in how levy funds are used.

It also argued that fines collected by ASIC—over $800 million awarded by courts—should reduce the levy instead of going to government revenue. “It’s unfair for advisers to fund enforcement when fines flow to Consolidated Revenue,” the FAAA stated.

The group urged the government to limit the CSLR levy to $20 million until adviser numbers recover from their current level of around 15,000. Most practices have only 2.5 advisers, leaving little room to absorb rising expenses. Many are cutting recruitment or considering leaving the industry.

Earlier, the FAAA called the CSLR an “unsustainable burden,” warning it could shrink an already declining workforce.

Leadership change at the association

Michelle Veitch will become chair in November 2026, replacing David Sharpe. Veitch, currently deputy chair, will serve until 2028.

She joined the FAAA in 2023 after a merger between the Association of Financial Advisers and the Financial Planning Association. Veitch also works as general manager of advice at PSK Private Wealth.

Outgoing chair Sharpe said the FAAA had unified its membership but noted the CSLR remained a major issue.

Regulatory costs have grown faster than revenue for many practices.