The Financial Service Providers Act 2008 and Financial Advisers Act 2008 Fees Regulations Discussion Document proposes that financial service providers and advisers should pay a one-off $350 charge to be registered, followed by an ongoing annual charge of $60.

Advisers looking to be registered and authorised will pay $1,385 upfront, with $410 ongoing, while registered Qualifying Financial Entities (QFEs) will pay $4,630, followed by $1,140 per annum. All fees are inclusive of Goods and Services Tax (GST).

Additional costs include $35 per person for criminal history checks and/or a $30 contribution to the administration costs of the dispute resolution scheme, depending on the make-up of the provider.

Between 10,000 and 12,000 financial service providers - including around 7,200 advisers - are expected to pay the fees which will cover the cost of an electronic Register of Financial Service Providers; a Ministry of Consumer Affairs run consumer dispute resolution regime; and Securities Commission supervision and authorisation of individual advisers and QFEs.

Treasury and Auditor General guidelines state the proposed fees are to be no more than is necessary to recover the costs incurred by the government.

On top of these costs advisers will need to belong to a dispute resolution service. Good Returns reported last week that Financial Services Complaints Limited is launching just such a scheme with standard price based around a one-off $500 joining fee charge, an annual fee of $500 and $1,000 for each complaint.

Institute of Financial Advisers president Lyn McMorran described the government proposed fees as confusing and believes they will dissuade independent advice, with QFEs looking a more cost-effective option.

"I'm certainly struck by how expensive it is to be an Authorised Financial Adviser. I'm concerned that there's not going to be that many to be honest," she says.

Murray Weatherston, head of the Society of Independent Financial Advisers, says advisers are price takers in the regulation process and therefore have to accept such charges as a cost of doing business. However, he is concerned about what other costs are to come, such as around competency requirements.

Submissions on the discussion document close on November 13.