Disproportionate increase in CSLR levy to further decimate financial advice sector and increase costs for consumers
- Increased costs for professionals to put financial advice further out of reach for many ordinary Australians.
- Unfair increase in CSLR levy is punishing good professionals for the actions of a few.
- Government must act quickly and decisively to support financial advice sector already on its knees.
CPA Australia welcomes the government’s announcement of a review into the Compensation Scheme of Last Resort (CSLR) following news of a staggering increase in the levy that financial advisers must pay each year.
Reports suggest that financial advisers will see the CSLR levy rise dramatically in 2025-26 from $1,186 to $4,516 – an increase of more than 250% in just 12 months.
This is not only disproportionate and unfair on the already under siege financial advice sector but it will create a further disincentive for people to join an already costly profession.
What’s more, the increased fees incurred by professionals will make the cost of receiving financial advice prohibitive for many ordinary Australians. The cost of providing financial advice is already considerable.
The CSLR was introduced in 2024 following the Ramsay Review in 2019, but was further supported by the final report of the Royal Commission into misconduct in the banking, superannuation and financial services sector.
Richard Webb, CPA Australia’s spokesperson on financial advice, said he’s pleased the government has now recognised the failings of the CSLR, but it must act quickly to save a financial advice sector currently on its knees.
“The issues of the past, perpetrated by the few, are being paid for by the financial advisers of today who have been doing their jobs properly and diligently the whole time,” said Mr Webb. “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.
“Not only are professionals in the sector being let down, but consumers are being punished too as the increase in the levy inevitably increases costs for individuals seeks affordable financial advice.
“At a time of increasing costs and regulatory burden, the rise in the CSLR levy of more than 250% is disproportionate and wholly unfair, driven by the unjust premise that individual professionals in an industry must pay for the costs of failed operators. This is like saying that doctors must pay for the malpractice of their colleagues.
“The government’s decision to review the Compensation Scheme of Last Resort is welcome because it is urgently needed.”
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About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 173,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, [email protected] or 0401 461 503