Mulino acknowledges need for CSLR sustainability

Mike Taylor

Managing Editor and Publisher

20 May 2026

With just three days left before the closure of submissions to the Treasury Consultation on the Compensation Scheme of Last Resort, the Government has again signalled it recognises the need to lighten the load on the financial advice community.

The Assistant Treasurer and Minister for Financial Services, Daniel Mulino made clear to the Stockbrokers and Investments Advisers Association (SIAA) annual conference in Melbourne that the Government’s will look at a range of options, including with respect to the so-called ‘but for’ approach adopted by the Australian Financial Complaints Authority (AFCA) but within a broad and fit for purpose regulatory design.

Mulino emphasised to the conference that, given the implications of the collapse of the Shield and First Guardian Funds, the Government was looking for a holistic solution including with respect to lead generation and managed investment schemes and noted that the collapse of Shield and First Guardian had impacted delivery of other legislation such as further tranches of the Delivering Better Financial Outcomes (DBF0) measures

The minister suggested that additional Budget funding directed towards the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority (APRA) would enable the regulators to better identify high-risk MISs.

Nonetheless, he said that MISs played a critical role in the system as collective investment vehicles.

In an update to members SIAA policy manager, Michelle Huckell welcomed the minister’s words but noted that the costs of the CSLR are already impacting financial advisers before significant numbers of claims regarding Shield and First Guardian even find their way through the system.

Huckell referenced the consultation review of AFCA’s ‘but for” approach and reiterated the SIAA view that the authority’s approach to calculating claims resulted in the CSLR not just paying for investors’ actual financial losses but covering their unrealised estimated profits.

The SIAA, she said, had long held that the CSLR was never intended to underwrite investment risk or pay complainants’ hypothetical ‘but for’ gains because of their investment decisions.