CPA Australia has expressed its deep concerns over the future of the financial advice sector following the recent announcement the initial levy estimate for the Compensation Scheme of Last Resort (CSLR) for the 2027 financial year will jump by 82 per cent.
“This is yet another disproportionate and punishing outcome for advisers who have acted responsibly,” CPA Australia superannuation lead Richard Webb noted.
“Legal and regulatory reforms in 2024/25 squeezed the sector already. Now these levy hikes could drive many more advisers out just when Australians need them most.”
The accounting body estimated the initial CSLR levy for the 2027 income year of $127 million for the financial services sector would equate to about $8300 per adviser given the number of practitioners currently in the industry.
It also pointed out this is significantly greater than the $75.7 million levy confirmed for the 2026 financial year and dwarfs the levy for 2023/24 of $4.8 million.
Like the SMSF Association and Financial Advice Association Australia, CPA Australia is calling on the government to fast-track its review into the levy.
“The sector cannot go on like this. Financial advisers are paying the price for failed products and individuals who have left the industry, leaving the rest to pick up the tab,” Webb said.
Further, he suggested the significantly higher levy will inevitably increase costs for Australians seeking affordable advice.
“An effective CSLR must protect genuine victims without collapsing the whole advice system. We urgently need a levy model that is actuarially sound, legally capped and fair to today’s professionals and their clients,” he explained.
The Institute of Financial Professionals Australia (IFPA) added its voice to the calls for reform of the scheme.
“We remain seriously concerned about the CSLR and have called on the government to urgently reform the scheme to ensure it is fair, financially sustainable and consistent with its original intent. Without prompt action, the rising costs threaten the viability of small advice practices and could further restrict consumer access to quality financial advice,” IFPA stated.
