As outlined in the legislation for the CSLR, the first levy period will be funded by the Australian government and the second levy period by the sub-sectors of the financial services industry that are covered by the CSLR.
This is in addition to the already-announced pre-CSLR complaint estimate for the levy that will be paid by the 10 largest banking and insurance groups in the establishment phase of the CSLR. This provided $241 million as an initial funding estimate including provision for the majority of claims involving Dixon Advisory and Superannuation Services (DASS).
The CSLR has provided a first levy period estimate of $4.8 million, which falls within the scheme’s annual levy cap of $250 million. As outlined in the legislation, the first levy period estimate will be funded by the Australian government. This estimate is expected to meet eligible compensation claims and costs from the CSLR’s commencement on 2 April 2024 to 30 June 2024.
While financial firms will not contribute to the first levy period, the CSLR noted the estimate falls within the legislated annual levy cap of $20 million for each sub-sector, with the estimate for each sub-sector being:
- Financial advice $2.4 million
- Credit provision $0.7 million
- Credit intermediation $0.8 million
- Securities dealing $0.9 million
In addition, the CSLR has provided a second levy period estimate of $24.1 million, which also falls within the scheme’s annual levy cap of $250 million and within $20 million sub-sector cap.
This estimate is expected to meet eligible compensation claims and costs from 1 July 2024 to 30 June 2025.
The estimate for each sub-sector is:
- Financial advice $18.5 million
- Credit provision $1.5 million
- Credit intermediation $1.8 million
- Securities dealing $2.3 million
The second levy period estimate is subject to a “disallowance” period, with the Federal Parliament having the opportunity to object to the estimate within 15 parliamentary sitting days of the legislative instrument being published on the Federal Register of Legislation.
Once 15 parliamentary sitting days have elapsed, the Australian Securities and Investments Commission (ASIC) will issue the levy for each of the financial firms and collect the levy on behalf of the federal government.
The estimates for the first and second levy periods are based on actuarial principles, as required by legislation. The CSLR engaged the services of a leading actuarial consultancy, Finity Consulting, to establish a policy for determining the estimates and to conduct detailed modelling and analysis for each estimate. This work was reviewed by a second, independent actuarial consultancy, Taylor Fry.
The CSLR board said: “These latest estimates are another milestone towards the CSLR being able to meet compensation claims from the victims of financial misconduct. We are committed to a robust and rigorous process that allows us to make the best estimates based on the best information available.”
The funding will pay for compensation claims of up to $150,000 to eligible consumers who have been the victims of financial misconduct relating to personal financial advice, securities dealing for retail clients, the provision of credit or the arranging of credit.
Why TAX Advisers on this? Institutions are responsible for over $40 billion of failed funds since 2007 and today represent over 97% of all AFCA complaints, they are by far the greatest failure for consumers in the Financial Services industry over the past 40 years. STOP MAKING ADVICE MORE EXPENSIVE AND FUND THIS ANOTHER WAY JONES!!!!
He is clearly not listening, and not interested. Too busy drafting carve-outs for his ISF buddies.
Who is going to hold Jones & the Govt. accountable for this??? Why such a disproportionate amount for Financial Advice? What about the ‘qualified adviser’ carve outs???
So if ISF’s are providing advice, how come they don’t have to pay the CSLR???
Good question.
I have absolutely no doubt that the Govt. won’t stop until we are all buried
another day, another adviser levy
Just more confirmation of the Govt’s intent to get rid of IFAs
All this talk about reform, relief, better times for the Industry ahead – blah, blah, blah – thanks for nothing Jones, Albo and Labor – shove your ASIC and CSLR Levy up your election ballot box.
Utter disgrace, disgusting advisers are paying for this too
The Govt., Jones & Treasury are committed to destroying the Professional Advice Industry with yet another Levy, whilst creating an unlevel playing field by bringing in ‘qualified advisers’ that offer free advice. All current advisers need to vote with their feet and show Albo, Jones and their buddies the door, come next election.
The system is corrupt and a failure. Rc was into banks ie credit providers why are advisers taxed 400% more for doing the right thing to pay for overzealous compliance against our compatriots.
The CSLR board said: “These latest estimates are another milestone towards the CSLR being able to meet compensation claims from the victims of financial misconduct.”
Wonderful – more client fee increases thanks to the hot mess and CSLR. Yet no action against the misconduct of ASIC who screwed the pooch in relation to Dixons Advisory.
Let’s make Advice more Affordable says Govt, Jonesy, etc
Advisers just paid the Triple ASIC Levy / Double Taxation theft.
Now add another $1350 freaking CSLR Adviser Levy each. FFS its such a sad joke.
And you can Guarantee that Dixons claims will barley be processed by 30 June 2024, thus the real costs of Dixons Dodgy MIS fiasco will fall on Advisers.
How much are MIS providers paying for CSLR ? NIL yet they cause most of the claims.
REAL ADVISERS NEED TO TELL CANBERRA TO GET STUFFED !!!!!!!!!!!!!!!!!!
All very good, however when is someone going to explain what this is actually going to cost us individually as advisers?
Let’s hope it’s not run by the same people who oversee the NDIS