SMSF Association Media Release
The SMSF Association says the newly released FY27 Initial Levy Estimate of $137.5 million confirms the pressing need for the Compensation Scheme of Last Resort (CSLR) to undergo substantial reform, particularly in relation to how the scheme is funded.
Association CEO, Peter Burgess says, “The FY27 estimate which assigns $126.9 million of the total levy to the personal financial advice sub-sector, again demonstrates the disproportionate cost borne by the financial advice profession.
“We support the principle of a last-resort compensation scheme, but it is unfair and unsustainable to expect the financial advice profession alone to pick up the cost of failed advice and products.”
Burgess also noted that the estimate has been published without incorporating any impact from potential Shield of First Guardian claims, with the Scheme itself acknowledging that a revised estimate in mid-2026 is expected to increase should those claims materialise.
“This level of uncertainty is a significant concern for the advice profession, and advisers are being asked to absorb rising and unpredictable costs stemming from failures they played no part in, and there is no indication that the frequency or scale of these failures is easing.”
With the CSLR already signalling that the FY27 revised estimate is likely to exceed the initial figure, the SMSF Association says the financial advice sector deserves greater transparency and a clear pathway towards sustainability.
Of further concern, is the sector is still waiting to hear if they will be required to pay a special levy to fund the previous levy period’s shortfall of more than $50 million, which now on reflection pales in comparison.
The SMSF Association is therefore again urging the Government to release the findings of the Treasury-led review of the CSLR, commissioned earlier this year.
“The review was established with the objective of assessing the long-term sustainability of the scheme.
“Those findings are now critical to informing the next steps, and the profession cannot continue operating under escalating levies and unresolved funding uncertainty,” Burgess says.