Adviser CSLR levy repudiation a dangerous option | Australian Markets

Financial advisers who refuse to pay the Compensation Scheme of Last Resort (CSLR) levy are more likely to be successfully put out of business by the Australian Securities and Investments Commission (ASIC).

A presentation delivered to the Association of Independently Owned Financial Professionals (AIOFP) convention outlined the powers ASIC can deploy in opposition to those that refuse to pay the levy in protest in opposition to its disproportionate affect on financial advisers.

The presentation delivered by the AIOFP’s Lionel Rodriques specified ASIC’s capacity to impose banning orders, and its capacity to droop or cancel licenses.

Delegates to the convention had been urged to help advisers’ need to be heard by way of Treasury’s present review of the CSLR declaring the desirability of a change to the CSLR structure and a broadening of the sub-sector base.

The message from Rodriques was that sincere advisers couldn’t proceed to keep subsidising criminals and that there have been classes to be realized from the United Kingdom’s Financial Services Compensation Scheme model which is funded by a broader base than that which applies in Australia.

He famous that the UK expertise has a broader base of 9 “funding classes” – Debt Management, Deposits, Funeral Plans, General Insurance Provision, General Insurance Distribution, Home Finance Intermediation, Investment Provision, Life and Pension Division, Life Distribution, and Life Distribution and Investment Intermediation.

The presentation urged that in future the CLSR be funded by all industry individuals – Fund Managers, Managed Investment Schemes, Superannuation funds, Platform Operators, General Insurance, Foreign Exchange Traders and Consumer Credit Insurance.

Detailing the workflow being dealt with or more likely to be dealt with by the CSLR regime, it famous

• 2019-2022 Dixon Advisory, $458 Million, 2773 complaints.
• 2023-2024 United Global Capital and Global Capital Property Fund, $85
Million, 538 buyers.
• 2025 Australian Fiduciaries, $160 Million, 600 buyers.
• 2025 Shield Master Trust/ First Guardian Master Trust, $ 1 Billion, 12,000 buyers.

Dealing with the session round how the Assistant Treasurer and Minister for Financial Services, Daniel Mulino ought to deal with the financial advice sub-sector cap over-run to $67l289 million for 2026, the presentation famous his choices.

• Spread compensation funds over a longer period of time.
• Apply a particular levy to solely the sub sector that has exceeded the cap.
• Apply a particular levy throughout extra sub sectors.
• Apply particular levy with compensation over a longer period of time.
• Apply a particular levy that doesn’t cowl the surplus.
• Minister could do nothing- no legislative prescription for any motion.