On 18 March, the CSLR board publicly released estimates of what advisers will be expected to pay for the first full year of the operation of the scheme – which starts on 1 July 2024.
The CSLR estimate for the first levy period is $4.8 million, which will be funded by the Australian government. However, the second levy period is estimated at $24.1 million, with financial advisers expected to fund $18.5 million or $1,186 per adviser.
Speaking on the ifa Show podcast last week, the Financial Advice Association Australia’s (FAAA) general manager of policy advocacy and standards, Phil Anderson, pointed out a number of issues regarding the manner in which the CSLR burden imposed on advisers has been calculated.
First and foremost, he said, advisers are being charged for legacy issues, meaning they’re being asked to cop the cost of complaints received against Dixon Advisory in the period preceding the royal assent of the CSLR legislation.
As such, the FAAA wants to see the government pick up the entirety of the legacy Dixon Advisory matters.
However, Chris Garlick, executive manager for compliance, risk and technology at Guideway Financial Services, offered an interesting potential solution to the burdensome cost.
Posting on LinkedIn, Garlick said: “It’s becoming increasingly evident that the only potential relief for financial advisers from the CSLR and the financial adviser levy hinges on the possibility of its extension to qualified advisers in its calculation.
“Should qualified advisers contribute to restoring the numbers of personal advice advisers to pre-royal commission levels, it could effectively halve these levies.”
Speaking further to ifa, Garlick said advisers need to approach the news rationally.
“We know how much the [CSLR] levy is now and people are reacting to that emotionally and want it removed or reduced. But that levy, just like the financial advice levy, has been enshrined by legislation. To change that levy, we need legislation to do it. Legislation isn’t something that happens in the short term,” he said.
“What advisers should be really focusing on is making sure that qualified advisers, or whatever they end up calling them, get included in the levy’s calculation.”
The advice profession is still waiting for the government to reveal the final look of the qualified adviser proposal, but what’s certain is that superannuation funds, banks, and insurers will re-enter the advice arena in the near future. Superannuation funds are said to already be increasing their adviser count.
“With super funds significantly bolstering their adviser numbers, plus banks making a few comments, saying they’re keeping a close eye on things and maybe re-enter [advice], it’s very important that qualified advisers get included in the levy calculation to ensure the levies get distributed equitably,” said Garlick.
To ensure that qualified advisers are included, Garlick said the FAAA’s ongoing advocacy work will be imperative.
“It’s in the FAAA’s interests and all the wider industry’s interests to advocate for it, because the CSLR needs to be sustainable over the long term.”
Moreover, the executive manager expects the qualified adviser cohort to boost overall adviser numbers to nearly 25,000 in the foreseeable future.
“What advisers should be really focusing on is making sure that qualified advisers, or whatever they end up calling them, get included in the levy’s calculation.”
Nice positive approach but the reality is Advisers can’t even get a simple change in legislation to reduce just a tiny amount cumbersome red tape. Nobody in Canberra listens to advisers, no-one ever has, and certainly MP Jones has completely disregarded and ignored all of the QAR submissions. Seriously, what is there to think that anyone in Canberra will make any positive change for Advisers???
All those that completed the Advance Advance Diploma via the FPA years ago and kept up with their education requirements over many years are “un-qulaified” and some stupid degree qualified bureaucrats think it’s ok to have a product flogger in an industry super fund be recognised as “qualified”. This country has gone the cleaners, the politicians with their so called degree have no idea!
And if pigs could fly there would be less cars Chris
PLEASE EVERYONE STOP using the term ‘qualified adviser’ tag. By continuing to reference this term, you create the assumption that we as an advice community accept and/or are resigned to this name designation. If we keep referring to them as they should correctly be referred to (i.e. ‘restricted adviser’ we keep the
pressure on government to ensure any reference to ‘qualified’ is removed. The UK made this adviser
designation for those advisers ‘restricted’ to singular product or aligned to fund… no need to re-invent the wheel with naming. All licensed advisers on the FAR please refer to super fund advisers as ‘restricted adviser’ so we start setting the narrative and keeping pressure on government.
With regards to ‘restricted advisers’ being included in CLSR we don’t want this. Let’s face it, when the super funds stuff up, and their ‘restricted advisers’ mess up their members retirement savings because they are not educated enough and/or provide conflicted advice that’s in the funds best interest and not the members, we don’t want them as part of same compensation scheme. If we include ‘restricted advisers’ as part of the CLSR, we reduce cost initially and then open ourselves up to the flood gates of future complaints via AFCA, with no separation of complaints handling and compensation between licensed advisers and ‘restricted advisers’…. furthermore, if they get away with the ‘qualified’ designation (because we don’t keep up the pressure by referring to them as ‘restricted’ and they are all part of the same CSLR, the consumer ain’t going to be able to distinguish which adviser group is responsible for creating Royal Commission 2.0 and the financial planning profession is finished completely next time around…. so I think it’s a terrible idea. Let the Super funds fall on their own swords….. sadly we as licensed financial advisers will have plenty of work fixing up members that have received bad advice from their ‘restricted adviser’ It’s bad enough we have to pick up the tab for historical advice failures from Dixon Advisory…. and let’s fact it those advisers were on the FAR.. I want nothing to do with these ‘restricted advisers’ when the avalanche of complaints hit AFCA, and the enviable fallout and finger point commences.
Although very unfair and I hate it, I’ll suck up the CSLR levy, but I will focus on referring to super fund advisers as ‘restricted advisers’ in every communication and discussion I have, and if all other advisers do the same we might have a shot. Whatever happens, keep these ‘restricted advisers’ away from any joint / shared association or compensation scheme.
PLEASE STOP USING THE TERM RESTRICTED ADVISER.
They’ll be excluded. 0 way unqualified qualified advisers will be paying for csolr or asic levy.
…i’ll finish your sentance for you
‘…because the banks and industry funds will NOT be asked to pay CSLR or ASIC funding levy for their internal product floggers.’
They (this present Government) won’t hit the “Qualified Advisers” with the levy.
It doesn’t fit the narrative.