The Compensation Scheme of Last Resort (CSLR) levy that will be applied to the financial advice sector will blow past the $20 million cap originally put in place, with practitioners set to foot the bill for $70 million.
The scheme released its initial levy estimate for the 2026 financial year, which will come to $77.975 million, with the lion’s share of that, $70.11 million, being attributed to financial advice, while $2.8 million will be attributed to credit provision services, $2.72 million to credit intermediaries and $2.34 million to securities dealers.
In contrast, the financial advice sector levy which applied for the first period, which ran from 2 April 2024 to 30 June 2024, was $2.4 million while the second period levy, for the period from 1 July 2024 to 30 June 2025, was $18.5 million.
CSLR noted the Australian Securities and Investments Commission (ASIC) was only authorised to levy up to $20 million at a sub-sector level and the remaining $50.1 million would require funding via a special levy. Any formal notification of this requirement would be made by the Financial Services Minister early in the 2026 financial year.
Under the $20 million cap that is in place, the levy per adviser will be $1295, but could climb as high as $4500 based on the numbers of advisers ASIC has used to arrive at its current figure.
The scheme added the total levy would go towards processing 1800 claims across the pre-CSLR levy and the 2026 financial year period and the payment of compensation for 491 claims in relation to the 2026 financial levy estimate, with CSLR chief executive David Berry noting the impact of ‘black swan’ events.
“In line with our administrative function, we have, with the assistance of external actuaries, calculated the initial levy estimate for the 2026 financial year. As previously foreshadowed in October 2024, the estimate exceeds the $20 million sub-sector cap for personal advice,” Berry said.
“The key contributors driving the expected number of claims are attributed to Dixon Advisory & Superannuation Services and United Global Capital.”
He also said he was concerned at the number of victims of financial misconduct, the harm suffered at the hands of a relative few and the impact this has on the reputation of an entire industry.
“We will continue to work closely with industry, Treasury, ASIC and the Minister’s office as we fulfil our legislative responsibilities alongside building greater trust amongst consumers in the financial services sector,” he said.
