FAAA says super trustees should stump up for CSLR

The Financial Advice Association Australia (FAAA) has called on Treasury to cut the Compensation Scheme of Last Resort (CSLR) special levy on the advice sector to zero and for superannuation trustees to stump up for the scheme.

Treasury recently commenced a targeted consultation on the distributions of the 2026-27 special levy for the CSLR.

This comes after the CSLR operator announced in July estimated claim costs for 2026-27 were $190.3 million. As the costs exceed the annual levy cap, the CSLR legislation provides for the imposition of a special levy to fund the excess costs so the scheme can continue paying compensation to eligible consumers.

"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 $1312 they've already paid for this year," FAAA chief executive Sarah Abood said.

"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."

FAAA also recommended Treasury reassess superannuation trustees as connected to the failures of Shield and First Guardian and be allocated to pay the CSLR.

"The exclusion of superannuation trustees in relation to Shield and First Guardian is difficult to reconcile with the [Treasury] paper's own test. ASIC has commenced proceedings against every superannuation trustee that made these funds available on its platform," FAAA said.

"Trustees' decisions to include these funds on their investment menus, and the lack of adequate monitoring thereafter, formed a large part of the pathway to loss."

Abood said FAAA is calling for greater transparency around the attribution of major CSLR matters to connected sectors.

"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 managed investment schemes (MISs) and financial advice should be reviewed," Abood added.

"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."