CSLR declares likely underspend

Mike Taylor

Managing Editor and Publisher

27 May 2025

In what represents a rare slice of good Compensation of Last Resort (CSLR) news for financial advisers, the scheme has announced that an underspend will occur this financial year.

The CSLR said that the status of lodged claims likely to be paid in the current financial year against the $24.1 million levied will not be fully utilised.

“The claim volume originally estimated in December 2023 is expected to eventuate, however, claims have taken longer than anticipated to reach the CSLR, and will be received in FY26,” the CSLR said.

The result is that the underspend will be utilised in forward years.

Commenting on the likely outcome, CSLR chief executive, David Berry said that beyond DASS, the CSLR has seen multiple large-scale firm failures within the personal financial advice sector, with at least two of these failures potentially leading to more than 800 claims.

“These failures continue to significantly impact the amount of compensation likely to be paid in the coming financial years. The key driver to the timing of payments remains the speed at which the CSLR receives claims.”

“The projected underspend will be utilised to pay compensation in subsequent financial years and be offset against the FY27 levy estimate,” Mr Berry said.

In line with a lower number of claims paid, the CSLR operating costs are tracking below the levy estimate.

The CSLR continues to focus on ensuring eligible victims of financial misconduct are supported in line with its legislative mandate.