The FSC has called for the cost of the CSLR to be brought to sustainable levels following news the initial levy estimate for FY2027 is $137.5m, an 82% increase on the 2026 estimate.
Each year the CSLR operator releases a revised estimate of the scheme’s total expected claims, fees, and operating costs for the relevant levy period. These figures are then used to set the annual levy amounts for each CSLR sub-sector.
This is another blow to law abiding financial advice businesses…
The revised estimate for FY2027, expected to be published mid-2026, is likely to be materially higher than $137.5m states the FSC, “…reflecting the emerging volume of potential Shield and First Guardian-related claims and AFCA’s recent acceleration in progressing its claims backlog”.
The FSC is urging the Assistant Treasurer to ensure the scheme is sustainable for the consumers who need it and aligned to its original policy intent to provide compensation as a last resort.
CEO of the FSC Blake Briggs said: “This is another blow to law abiding financial advice businesses who face continued cost pressures and who will again be called on to pay up to the $20 million sector sub-cap, and potentially above it, for the wrongdoing of others.”
FAAA CEO Sarah Abood agreed saying the latest estimate from the CSLR is “very large and will only get worse once the situation with Shield and First Guardian is better understood”.
“We have been saying for some time that it is imperative that financial advisers should not pay more than the $20 million sector cap which is already very high, particularly when you bear in mind that the vast majority of this levy is paid by small, privately owned firms with very limited capacity to absorb extra costs.
“We urge the government to make urgent and significant changes to the CSLR to ensure fairness and sustainability.”
