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Commenting in response to today’s announcement by Minister Mulino, FAAA CEO Sarah Abood said:
“We acknowledge that Minister Mulino has decided to spread the CSLR Special Levy for 2025/26 across all 23 retail-facing subsectors, however the largest allocation of 22% to financial advisers is unfair and unsustainable.”
“Advisers paying the largest share of the levy had nothing to do with the misconduct that gave rise to the need for consumer compensation. In that context, spreading the levy based on capacity to pay is the most just of the many unjust possible options. However, by choosing the ASIC funding levy as the basis for allocation, rather than spreading the impact on the basis of capacity to pay, the Minister has imposed an unsustainable additional financial burden on financial advisers
“The impact of this allocation basis is an additional $10.4 million levy for financial advisers – in addition to the $20 million that financial advisers have already paid in CSLR levies this year. This represents the biggest single allocation of the special levy to any sector. In total, financial advisers will pay $30.4 million this year – 45% of the total levy of $67.3 million. Using ASIC’s adviser numbers of 15,041, that’s an extra almost $700 per adviser – taking the total cost this year to over $2,000 per adviser. This takes no account of the likely substantial decline in adviser numbers at the end of this year.
“Our sector is made up of just under 6,000 primarily small and micro businesses. There is an average of only 2.6 advisers per practice, who are already struggling under ongoing significant cost pressures. It should be clear that our sector has the lowest capacity to pay of any of the sectors.
“We call on the Minister to reconsider this unjust additional levy that threatens the very viability of our profession. Nothing is achieved for Australians, particularly for those seeking retirement advice, if we drive out compliant financial advisers who are doing the right thing, by forcing them to pay for the misbehavior of a small number of bad actors.
“We also urge the Minister to confirm that financial advisers will not be asked to pay the CSLR levy on the same basis in future years. Otherwise, this uncertainty will further accelerate departures from our sector and reduce the number of new entrants.
“We welcome the Minister’s commitment to make changes to the CSLR to put it on a fairer and more sustainable footing, and also his commitment to make decisions that will reduce the prospect of future financial collapses impacting the CSLR. We would add that these issues have been known for some time, and the need is urgent to make decisions that will protect consumers and ensure compensation continues to be available into the future.”
