SMSF Association Media Release
The Compensation Scheme of Last Resort (CSLR) revised levy estimate for the 2026 financial year places “a far too heavy burden” on the financial advice sector.
SMSF Association CEO Peter Burgess says the revised levy of $67.2 million for the financial advice sector, when coupled with the recommended special levy of $47.3 million, are simply “too high” for the sector to sustain.
“While the revised estimate is slightly lower than the initial estimate of $70.1 million, we are bitterly disappointed with the quantum of the levy amount that punishes the vast majority of advisers who act in the best interests of their clients.
“The CSLR CEO David Berry explicitly acknowledged this when announcing the levy, saying ‘the harm caused by those in the finance sector doing the wrong thing disproportionately impacts and detracts from those acting correctly’.
Burgess says having the CSLR is an important initiative to build confidence in the financial advice industry.
“But it’s current funding model is unstainable and inequitable, posing a risk to the viability of the advice sector and the CSLR,” he says.
“We urge the Government to expedite the review of the CSLR that it commissioned back in January.
“When the review was announced, the Government stated that ensuring the scheme is sustainably funded would be an important focus.
The Association also lamented the occurrence of large-scale advice model failures leading to the ever-increasing CSLR costs for compensation claims.
“It’s not just the scheme itself that needs to be reviewed, it’s what being done “up-stream” by the regulator to detect and act on early signs of advice failures, that also needs to be reviewed.
“By the time the claims reach the CLSR its usually too late to avoid or mitigate the cost of compensation”, Burgess says.