Financial Advice Association Australia has urged Treasury to set financial advice’s Tier 1 allocation under the proposed 2026-27 Compensation Scheme of Last Resort special levy at zero, with the $10 million redistributed across other sub-sectors.
This recommendation is one of five in the association’s submission to Treasury’s consultation on applying the waterfall framework to the 2026–27 special levy.
Adding another $10 million means about $660 more per adviser…
FAAA CEO Sarah Abood said: “Financial advice has already paid its $20 million CSLR cap for the 2026-27 year. Adding another $10 million means about $660 more per adviser, on top of the $1,312 they’ve already paid for this year. For a profession almost entirely made up of small businesses, a profession that has also almost halved since 2019, that is not marginal. The additional advice allocation should be zero.”
The submission cites the FAAA’s April 2026 survey of 878 members, in which 44 per cent said they were aware of colleagues intending to leave the profession as a result of the CSLR (see also: CSLR Levy Fuels Adviser Exit Fears).
While welcoming elements of the proposal, including spreading the levy across a wider range of entities, the FAAA has questioned how major claims cohorts are attributed. It says Treasury’s paper assesses responsible entities as connected to the Shield and First Guardian collapses, but not the superannuation trustees that offered those funds. The FAAA is also seeking published reasoning for classifying the UGC (GCPF) and Brite cohorts as “financial advice only”.
“We are calling for greater transparency around the attribution of major CSLR matters to connected sectors,” Abood says. “For example, ASIC has taken action against super trustees that put Shield and First Guardian on their platforms. In that context we believe that the decision to attribute Shield and First Guardian matters only to MISs and financial advice should be reviewed. In addition, research houses, social media platforms and auditors have all played a part in these collapses, and they should share the cost.
“A sustainable CSLR depends on stopping these costs from entering the scheme in the first place, and more attention needs to be paid to prevention, and stopping these collapses much earlier.”
Click here to access the FAAA’s full submission to the Consultation – Compensation Scheme of Last Resort application of the waterfall framework for the 2026–27 special levy
