Federal MP joins calls against CSLR, AIOFP seeks High Court challenge funding

Federal member for McPherson Leon Rebello has urged Assistant Treasurer Daniel Mulino to consider the concerns of advisers around the CSLR’s funding architecture and “possible options to widen the contributor base”.

Rebello sent the letter, seen by ifa, on behalf of one of his constituents, financial adviser Gayle McKew of Prosperity Planning Partners, who had written to the MP to express her issues with the construction of the CSLR and how it would impact both advisers and consumers if left unchanged.

“Ms McKew is concerned that escalating CSLR levies are prompting experienced, law-abiding advisers to sell or retire early, reducing access to professional advice at a time when Australians face an estimated $4.4 trillion intergenerational wealth transfer,” the MP wrote.

“She is further concerned that changes to education and experience pathways commencing on 1 January 2026 will reduce adviser numbers by a further 2,000 to 6,000, potentially leaving as few as 6,000 qualified advisers from approximately 15,000 today, down from more than 28,000 at 31 December 2018.

“She suggests with fewer advisers, the per-adviser levy necessarily rises, accelerating exits among those who have done nothing wrong and shifting costs onto their clients who have suffered no loss.”

According to the letter, the primary objection to the funding model is that the liability is concentrated on just four of the 36 potential sub-sectors due to the rules around membership of the Australian Financial Complaints Authority (AFCA).

“In her view, this arrangement unfairly penalises advisers for the misconduct or failures of others while leaving many market participants outside the funding base,” Rebello said.

“She notes your capacity to adjust settings and asks that you consider broadening the contributing classes and decoupling CSLR liability from AFCA membership so that costs are more fairly shared across the sectors that benefit from consumer confidence in the system.

“She cautions that imposing special levies on the remaining cohorts within the four funding classes will hasten the exodus of capable advisers and ultimately harm consumers.”

AIOFP opens ‘Affiliate Member’ status to fund High Court challenge

Also seeking to reshape the CSLR, the Association of Independently Owned Financial Professionals (AIOFP) has detailed plans for its potential High Court challenge of the scheme, which includes offering discounted Affiliate Memberships to fund the action.

“The AIOFP does not want to be responsible for dismantling an important consumer protection mechanism if we are successful with a High Court challenge but we will have no choice if the structure of CSLR is not satisfactorily and fairly amended,” said executive director Peter Johnston in an email to members.

“We will make that decision once the minister receives Treasury's CSLR recommendations in the near future and announces the government’s position.

“The funding of a High Court challenge will be put to members at the AIOFP AGM.”

In order to help fund the challenge, Johnston said the AIOFP would offer a 12-month 50 per cent discounted price to become an Affiliate Member of the AIOFP for $184. It does not come with voting rights at conferences or the AGM, but includes access to all other member services and protection.

“These fees will help subsidise a High Court challenge which will assist the profession and send a message to Canberra we won't be trodden on, and the advice profession will push back,” he added.

“The greater number of Members the AIOFP has, the greater the influence in Canberra.”