CSLR levy estimate rises by $60.7m

Mike Taylor

Managing Editor and Publisher

2 July 2026

Financial advisers appear to be facing another special levy hit because of the funding mechanism for the Compensation Scheme of Last Resort (CSLR) with the scheme announcing a $60.7 million increase in its Financial Year 2027 levy estimate.

The CSLR says it will be seeking another special levy with respect to the Personal Financial Advice sub-sector.

The CSLR today said that the its actuarial consultants had revised the levy estimate upwards from the initial estimate of $137.5 million to $198.1 million, with the bulk of the load to be carried by the personal financial advice sub-sector.

Indeed, the CSLR documentation shows the personal financial advice sub-sector rising from the initial estimate of $126.9 million to $190.3 million.

The CSLR said it acknowledges that the increase in the estimate is significant and attributes the lift to the expected 71% increase in compensation claim payments in FY27.

It said the additional claims are largely due to:

• The final cohort of claims related to Dixon Advisory & Superannuation Services (DASS), following faster-than-anticipated complaint processing by AFCA.
• The first tranche of claims associated with the Shield and First Guardian Master Fund product failures.

The CSLR noted that the initial FY27 levy estimate published in November, last year, had excluded any impacts from Shield and First Guardian Master Funds due to limited available information.

“Since November 2025, details have emerged relating to the potential size and scale of compensation required from the CSLR in relation to Shield and First Guardian Master Fund failures; consequently, the revised estimate now incorporates an allowance for claims relating to these products,” it said.

“The CSLR has now been in operation for two years. Our experience indicates that the overwhelming majority of claimants believed they were taking a prudent and positive step by placing trust in a professional to provide expert advice in a complex financial system. Many are now left feeling as though that this trust was misplaced,” CSLR chief executive, David Berry said.

“The CSLR has now paid over $200m in compensation to more than 1,600 victims of financial misconduct, with the majority of compensation paid representing money lost from defective personal financial advice and, in many cases, the compensation paid provides for only a partial recovery of hard-earned savings.”

“Unfortunately, we see the disproportionately negative impact of individuals within the financial services sector who have done the wrong thing. That impact weighs upon the whole sector and comes at the expense of the lasting emotional, physical and financial wellbeing of individuals working hard to save for retirement,” Berry said.

“The CSLR remains committed to ensuring eligible consumers have access to compensation where financial firms have failed, and to maintaining transparency around the operation and funding of the Scheme.”