CALI’s CEO Christine Cupitt is set to meet with Financial Services Minister Daniel Mulino at a round table discussion later this week at which she will argue for fairer treatment of financial advisers – particularly risk advisers – when it comes to shouldering the cost burden of the Compensation Scheme of Last Resort.
At the round table, which will also be attended by consumer groups and other industry stakeholders, Cupitt will be calling on the Federal Government to help fund the CSLR shortfall and to reduce the financial pressure on advisers.
Advisers are currently facing a potential $4,000 special CSLR levy due in part to failures linked to the Shield and First Guardian Master Funds and consumer claims for their losses.
Treasury confirmed last year that a $47.3m special levy will apply in the 2025-26 financial year to meet higher-than-expected CSLR claims, with advisers set to pay more than 20% of it.
Cupitt said life insurers support spreading the CSLR levy across the broader financial services sector, and the Government should also share part of the cost.
Risk advisers aren’t a threat to Australians’ savings
“Risk advisers aren’t a threat to Australians’ savings, instead they help them access peace of mind and financial security when they need it most,” said Cupitt, adding:
“The scheme is very important for victims of financial misconduct, and the Government needs to take a fairer approach and make sensible changes to the design of the scheme to ensure it remains sustainable in the long run.”
Cupitt said the Government’s promised Delivering Better Financial Outcomes reforms would play a significant role in responding to financial misconduct.
“We have seen firsthand what happens when people don’t have access to professional financial advice,” she said. “They are left with no one to talk to and, in the worst of cases, with no financial safety net to lean on when they need it most.”
See our report: CSLR Levy Fuels Adviser Exit Fears
The imposition of a CSLR levy on risk only advisers is a gross example of highway robbery. In 1865, the New South Wales government passed legislation so the bushrangers could be shot on site without any penalty. What a pity we can’t apply that to government.
Why should I, as a risk only adviser, who does not provide advice on super investments or non-super investments, have to fork up for the mistakes of product promoters and product manufacturers, such as Dixon, Shield and First Guardian, when at the same time I note that most funds, including those promoting ETF’s, are apparently not contributing to CSLR. Neither of course is the government contributing.
And there doesn’t seem to be any account that good old-fashioned greed convinced some investors it would be good to change.
Can anyone honestly tell me that we won’t have a repetition of this criminality in funds management stuff sometime in the next five years?
As far as I’m concerned, the writing is on the wall – that CSLR levy is not going to stay at its current level. I’ve just been levied $1786 for CSLR for the 25 – 26 years, even though I resigned from the FAR in February 2026. Apparently, there is no such thing as a pro rata payment.
On top of that there was an ASIC levy, currently of $2600. That’s where advisers act as litigation funders, with no control over whether or not the ASIC choice to litigate is properly based, and where the revenue from the court case goes to Consolidated revenue. It’s effectively a tax. Thank you Jane Hume.
It’s blatantly obvious to me that the CALI prediction of $4000 year for CSLR will frankly be proved to be grossly underdone very soon. I predict that the CSLR levy will very soon be around the $10,000 mark if AFCA is permitted to proceed with its “if only” determinations. Talk about snouts in the trough.
Should anyone be bothered to ask me whether or not a career as a risk only adviser is a good idea, my answer would be that if you, and your accountant, undertook proper due diligence from a business point of view, you would not become a risk only adviser. Compliance is killing us, and now being in practice is just too expensive with two grossly unfair levies
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