The Compensation Scheme of Last Resort’s levy for the 2027 financial year has been revised upwards to $191.8 million – an increase of $60.7 million over the initial estimate.
As expected, the vast majority of that figure ($190.3 million) is attributable to personal financial advice, which means the special levy is at least $12,000 per authorised representative. Per the scheme’s statement, this increase is largely due to the final batch of Dixon Advisory claims and the first group of claims related to Shield and First Guardian.
Based on the revised levy report from the CSLR’s principal actuary, Finity Consulting, Dixon accounts for around half (46 per cent) of the scheme’s advice-related costs for FY27. Dixon claims for the period increased by $29 million to about $90 million; Finity’s report said this was due to operational efficiencies at AFCA, which has indicated that it will be able to process all remaining Dixon complaints in the 2027 financial year.
The biggest contributor to the revised levy, though, was Shield and First Guardian. In its initial levy estimate report, Finity described the two collapsed funds as a “significant area of uncertainty,” adding that the FY27 levy could end up materially higher “if it becomes clearer that Shield and First Guardian claims are likely to be paid [during this period].”
That’s exactly what has come to pass, and the CSLR is now expected to pay around $38 million in Shield and First Guardian-related claims (inclusive of AFCA fees) over the next 12 months – and that’s without factoring in Interprac Financial Planning.
As the report explained, no provision has been made for Interprac claims in the levy estimate as it is currently solvent. However, as Interprac is the largest advice firm implicated in the Shield and First Guardian failures – representing 1,277 of the approximately 3,500 relevant claims lodged with AFCA as at 30 April – the report said Interprac’s CSLR eligibility “will materially affect the ultimate claim costs.”
Were the estimate to include Interprac, the report said the potential cost could increase to around $150 million. And if Finity included all current complaints, including those not within the scope of the CSLR, costs would increase to $200 million.
“More broadly, we estimate that if every affected investor ultimately were to be CSLR-eligible, and were to be compensated, then the total First Guardian/Shield claims payable by CSLR could be in the order of $900 million,” the report said.
Commenting on the levy, CSLR chief executive David Berry said: “The CSLR has now been in operation for two years. Our experience indicates the overwhelming majority of claimants believed they were taking a prudent and positive step by placing trust in a professional to provide expert advice in a complex financial system. Many are now left feeling as though that this trust was misplaced.”
“The CSLR has now paid over $200m in compensation to more than 1,600 victims of financial misconduct,” Berry added.
In a statement, Financial Advice Association Australia general manager policy, advocacy and standards Phil Anderson described the revised levy as a “further blow” to accessible financial advice.
“The announcement of another sizeable CSLR cost of $190 million in 2026/27, and the prospect of sizable special levies for the foreseeable future, is an unsustainable burden for financial advice practices and their clients, while offering little comfort to the victims of financial collapses,” Anderson said.
SMSF Association chief executive Peter Burgess said the levy “confirms the unacceptable burden placed on financial advisers.”
He added that while consumers should have access to financial compensation, “holding a sector accountable for the failures of firms that intentionally prioritise profit to the detriment of their clients is both unsustainable and unjust.“
I would be happy to join any association that spend members money on full page newspaper ads and TV ads to educate the public what a rort this is and why we (and they) all end up paying for it one way or another…
I don’t understand how Evans Dixon are not responsible for their advisers bad advice. I read some time ago that Evans Dixon still have many Dixon clients who pay them fees. Could it be that David Evans is Melbourne elite? It is so unfair that advisers who do the right thing and have no involvement in the Dixon, Shield and First Guardian bad advice have to pay compensation under the CSLR.
Why do we need to pay PI if everything just goes to CSLR and we fund that anyway, what use is PI if it cant cover these situations.
Lather, rinse and repeat.
1. demonise advisers
2. regulate them to oblivion
3. introduce new adviser class immune from said burden #2 (institutional/industry fund sales force)
3. incentivise moral hazards on advisers and promoters. (CSLR) :: privatise profits, socialise losses
4. dirty minority advisers act on said incentives and runnaway
5. collect unlimited $penalties from innocent advisers and their clients – taxation without representation, financing the whole process
Start again at 1.
How come the government/politicians aren’t held to the same account for their financial and other mismanagement of this country and the harm inflicted on the people?
When one person kills another, the whole community isn’t sent to jail!
When a lawyer is found to be in breach of their duty, not all other lawyers suffer disbarment.
When an accountant mismanages or manipulates a company’s books to hide theft, not all accountants have to pay.
Only the guilty should pay the price. The profited. They were deliberate in their actions. They knew what they were doing. And they benefitted. All at the expense of every other financial adviser. Continued political bias that affects self-funded small business advisers and all super members Australia-wide – except, of course, politicians!
expressing my strong opposition to this revision of the CSLR levy.
The current structure, which requires the industry to pay for the failures of a few, is unsustainable and fundamentally unfair. It is the government’s responsibility to fund these compensations rather than burdening professional advisers with the costs of “bad eggs.”
If the levy continues to increase in this manner, it risks a collective protest from the 15,000 advisers across the industry. Mass non-payment would lead to a far greater crisis than the one this scheme intended to solve.
The industry cannot be expected to bail out failures they did not cause. I urge you to reconsider the current CSLR model and seek a more equitable solution.
Industry already pays profession indemnity insurances
its does not need another levy on top
No new adviser will enter the industry and its gonna kill it
How about this as an alternate option – all advisers now include a CSLR Levy on all client fees!
Those who actually profited or had the power to prevent the losses aren’t paying for it…..instead, the bill lands squarely on every adviser, whether they were involved or not.
If we want true fairness, let’s stop making the last in line foot the whole bill and start charging those who actually gained or had the control to stop it.
Meanwhile ASIC is running around saying that fees on super have to be justified and fair etc. But keep increasing the costs for planners, then wondering why planning fees are going through the roof. Ive always tried to keep my fees reasonable,yet have had to increase some clients fees by more than 20% recently to ensure I’m still in business in 5 years. This job is genuinely getting unsustainable
Only 20% in five years, you’re either a saint or a bad businessman. General CPI was more than 20%, CPI on advice costs has been far higher. ASIC fees alone have increased 102.6% when you add CSLR to it it’s circa 216% or 3.2 times. If you also include AFCA membership, FSCP costs, FAR administration, education standards compliance and PI insurance inflation, the increase in total regulatory/compliance cost per adviser would be substantially higher than 216%, likely several hundred percent over the same period. However, ASIC and CSLR alone support the 216% figure.
Which Child or Kidney do the CSLR want first as payment from each adviser.
The CSLR money pit to the core of the Earth.
GO AND GET STUFFED GOVERNMENT / CSLR.
ADVISERS ON MASS MUST REFUSE TO PAY.
LET ASIC / CSLR TRY TO CLOSE THE WHOLE INDUSTRY AT ONCE.
I was thinking of only a modest adviser service fee increase this year given the rising cost of living everywhere – but this is not really possible if the next CSLR special levy is $12,000 per adviser. As an adviser who has never had an adverse claim and does everything with the client’s best interest in mind – having a scheme that makes me financially accountable for the wrongdoings of a minority of advisers (if you can even call them that) is disgraceful. It has been said time and time again – make Dixon accountable for the wrongdoing of their advisers (a change in law the enable this would be far cheaper than the increased amount of compensation). I cannot get my head around how Dixon can still have clients – surely they have read the news and understand the moral corruption of this organisation.
“modest” ?
My fees are rising 18% from 1 August 2026.
Takes into account this rubbish as well as the INCREASING red tape. (AML/CTF – by way of example).