The FMA is consulting on proposed changes to its levy that would see advisers and DIMS providers pay more each year to the regulator.

The FMA currently gets $26.2 million a year in funding, $11m of which comes via taxpayer funding from the Government.

It says it needs more to pay for its newly expanded regulatory operations.

The consultation paper outlines three funding options that are possible. The FMA would like to get to $38.6m per year.

With no funding change, 60% of the FMA’s total funding will come from the FMA levy, reset to $17.1m.  Under the biggest change proposed, the levy would make up 70%, or $27m a year.

IFA chief executive Fred Dodds said the percentage increases to the overall levy take being discussed were large, ranging from a 33% increase at the lowest proposed level, through to a 65% increase for the "enhanced case", which is the FMA's preferred option.

"With those sorts of increases you would think that Government should be 'encouraged' to increase its $11m," Dodds said.

He said it would be reasonable to expect the Government contribution to rise to $15m.

He said the Ministry of Business, Innovation and Employment had expressly noted in the Financial Advisers Act reviewthat it wanted to see no undue compliance cost for advisers.

Under the no-change model, AFAs would pay $300 a year, or 4.1% of total levy revenue. Under the lower funding case, they would pay $420, or $520 under the FMA's ideal scenario.

For DIMS providers, the increases are bigger.

At the moment what they pay depends on whether they operate a personalised DIMS service under the Financial Advisers Act, which costs them $304 a year, or if they are licensed to offer class DIMS through the Financial Markets Conduct Act, which costs $1739.

New tiers would be introduced that would increase those charges to between $4000 and $6500 for those with up to $100m under management, $8000 to $13,000 for those with $100m  to $250m and $26,000 to $38,000 a year for those with more than $250 million invested through DIMS.

"The Financial Markets Conduct Act represents a significant increase in the scope of the FMA’s regulatory framework – so more 'contributors' to the funding and more from big end of town," Dodds said.

He said the FMA's increased spending was justified because they had a focus that included conflicted conduct and more oversight of sales and advice.

"With a whole lot more 'financial advisers' up for conduct requirements they certainly would need more or pass the ball on some regulatory stuff to some licensed professional bodies to assist with this task. "

The FMA said it was unable to comment.