In an announcement on Wednesday morning ahead of an industry roundtable on the Compensation Scheme of Last Resort (CSLR), Financial Services Minister Daniel Mulino said the government is “acting to strengthen consumer protections and improve stability and confidence in the superannuation and financial services sectors which are critical to investment and productivity”.
“Supporting consumers includes ensuring the CSLR is there to support them when they need it,” Mulino said.
“A special levy of $47.3m will apply for the financial year 2025-26 to fund the increased call on the CSLR this year. This will be applied broadly to reduce the burden on any one subsector and to ensure of the sustainability of individual subsectors and the CSLR as whole.”
While the levy is to be spread more broadly than just the financial advice subsector, it is still set to take the heaviest hit. Advisers will have to pay for 22 per cent of the additional amount, or around $10.4 million.
Credit providers will pay 15.3 per cent, responsible entities will cover 13.7 per cent, super trustees 12.9 per cent, and all other sub-sectors are on the hook for less than 10 per cent each.
According to the announcement, the decision for the 2025-26 special levy is “not taken to set a determinative precedent for levy decisions in future years”.
In November, the CSLR published its initial levy estimate for FY27, with the total calculated at $137.5 million.
As is the case with prior CSLR estimates, the financial advice subsector is set to bear the lion’s share of the cost at $126.9 million – $106.9 million above the subsector cap.
In a fact sheet accompanying the announcement, Treasury said basing the funding option on regulatory effect would “reduce the risk of the special levy impacting the ongoing viability of any sub-sector”, while acknowledging the broader financial system benefits from ongoing consumer confidence generated by ensuring access to last resort compensation arrangements.
It also “leverages an existing framework and metrics for apportioning costs across sub-sectors, enabling application of the levy framework to be efficient, effective, and transparent”.
“We are acting in partnership with industry and consumer advocates. That is why today I am hosting a roundtable on the CSLR, where we will discuss the special levy and some of options on the table for post-implementation reform,” Mulino said.
“We will also be looking at options for professional indemnity insurance, and I will work with Assistant Minister for Productivity, Competition, Charities and Treasury, Andrew Leigh, to consider how the misuse of insolvency processes can allow financial advice firms evade Australian Financial Complaints Authority (AFCA) determinations.”
The minister also flagged that the government will release an options paper on post-implementation reform of the CSLR in early 2026.
“This will address potential structural and technical changes to the scheme itself to ensure it remains sustainable,” he said.
“Building trust in the financial system will support the government’s productivity agenda. Defective schemes attract funds that should otherwise support innovation and economic growth.
“And when financial schemes collapse, investor confidence diminishes alongside. Australians become more cautious about investing and this can tarnish even legitimate, well-regulated products.
“This work will maintain confidence in the Australian financial system, paying dividends for consumers and the economy as well as delivering a stronger superannuation system so Australians can have a dignified retirement.”
Impact of Shield and First Guardian
The minister’s announcement also leaned heavily on the damage that the Shield and First Guardian Master Funds have done to the Australian public’s confidence in the financial system.
“We need to ensure consumers continue to have trust in the superannuation system to help them provide for their own retirement,” he said.
“The alleged practices employed in the cases of the Shield and First Guardian Master Funds have highlighted the need for reform.
“Those include high pressure lead generation pushing people to switch their retirement savings into higher risk environments and products such as low-quality managed investment schemes.”
Mulino added that the government is considering “targeted reforms” to deal with the issues across the whole ecosystem, with a consultation expected early next year.
“We want to ensure consumers can be properly informed before making the decision to switch what are now large sums of superannuation savings, and more protected when they switch,” he said.
“Switching to a better performing superannuation fund can significantly improve the retirement outcomes for Australians, however, the decision to move requires careful consideration.”
Let’s be clear about where responsibility actually sat.
Macquarie approved Shield onto its platform and has since admitted it did not actively monitor the fund.
Equity Trustees, as responsible entity, provided what can only be described (from the evidence) as “easy peezy” oversight, despite statutory duties that go well beyond rubber-stamping.
And SQM published research reports telling advisers and clients property exposure was ~20%, when in reality it was closer to 70%.
Those are not adviser functions.
They are platform, trustee and research gatekeeper failures.
Advisers didn’t approve the fund.
Advisers didn’t control asset allocation.
Advisers didn’t sign off valuations or liquidity promises.
Yet under CSLR, advisers are being handed the bill while the institutions that approved, oversaw and validated these products skate past with “regulatory effect” footnotes.
If this levy were truly about responsibility, Macquarie, Equity Trustees and SQM would be front and centre — not the retail advisers who relied on their approvals, oversight and research in good faith.
This isn’t shared accountability.
It’s accountability laundering.
This should be based on responsibity. ASIC pay 90% and everyone else paying 10%
Time to start paying out those First Guardian victims and ASIC should be held to account
The ASIC cardigan wearing keystone cops should be paying 100% due to their incompetence and inability to act and stop financial events like this before they occur…
All of this could have been avoided if ASIC actually acted on the early tip-off’s provided to them and engaged in better data collection from super fund trustees to identify red-flags. They’re the teflon regulator – unaccountable to anyone. What’s needed is reform within ASIC.
“We want to ensure consumers can be properly informed before making the decision to switch what are now large sums of superannuation savings, and more protected when they switch”
How can ASIC be asking for more reform when they freely allow unregulated property spruikers, posing as quasi advisers to provide advice to roll peoples super into a SMSF and invest into property. Property within SMSF’s make up a huge amount of AFCA claims, yet ASIC aren’t asking for any reform to address this!
Attention, all Government minister, when you stop feeding from the trough:
Reduce supply of advisers. DONE
Increase cost of doing business. DONE
Impose expensive compliance burdens. DONE
Mulino just so you get it – CLIENTS pay the CSLR and all rising levies and good advisers get bashed. As usual.
Where are the MIS payments?
Why aren’t these culprits from Shield Master Fund and First Guardian in prison, there are a lot people that have lost a collective $1.2 Bil. This amount doesn’t include those that have lost money in Global Capital Property Fund and are suffering. We have been managing over 600 SMSF’s that were affected by these 3 failed investment fund. Many of these funds should not have been setup. There are people still involved in setting up SMSF’s for property funds. They should be stopped before more people lose their hard earned money. SMSF set up process should be tightened.
MIS pay how much ? ZERO
Get stuffed Mulino, Jones, Canberra & ASIC.
Advisers must refuse to pay.
Government THEFT from innocent Advisers.
CSLR – making advice less affordable than ever. What a champion policy. Who thought voting in this mob was a good idea? Or the Teal seat warmers achieving nothing.
As a client of a financial advice firm, these extra costs are all reflected in my fees. Why do I have to pay more to cover ASIC’s incompetence. In addition any ASIC levied fines that are collected go back into Government coffers. There is something very wrong here.