Australia outlines financial advice and insurance cost recover

Investigated unlicensed activity costs are fairly recovered from relevant sub-sectors.

Australian Securities and Investments Commission (ASIC) unveiled its Cost Recovery Implementation Statement (CRIS) for the 2023-24 fiscal year, which details estimated regulatory costs and levies for each industry subsector, assisting entities in planning and budgeting for these charges.

Introduced in 2017, ASIC's industry funding model ensures the costs of regulatory activities are covered by regulated entities rather than taxpayers. 

The figures in the CRIS are preliminary, with final levies set to be published in December 2024 and invoiced between January and March 2025.

When ASIC investigates an individual suspected of providing unlicensed financial advice and dealing with unlicensed insurance products, costs are recovered proportionally from the relevant sub-sectors. 

If 30% of the investigation focuses on financial advice and 70% on insurance, 30% of the costs would be charged to the personal financial advice sub-sector and 70% to the insurance product provider sub-sector.

This cost recovery approach mainly applies to sub-sectors involving licensed consumer services, primarily affecting financial advice, insurance, deposit-taking, and credit sectors. Such misconduct is uncommon across all sub-sectors regulated by ASIC.