CSLR – Poor design and implementation by Government
Phil Anderson
The FAAA has been outspoken in our criticism of the CSLR. In our submission to the Senate Economics Committee inquiry into Wealth Management Companies we have highlighted serious concerned about the actions of specific companies, such as Dixon Advisory, and the inadequacy of the regulatory response by ASIC. We have addressed problems in the insolvency laws and most critically in the actual laws that established the CSLR. This is an important issue for the financial advice profession, with a potential exposure of up to $135m for just Dixon Advisory alone and with more collapses continuing to emerge.
Now is a critical time as we await the expected announcement on the CSLR cost estimate and levy for the 2025/26 year. The Government are the key player in this. They are the ones who designed and implemented the CSLR and they are the only ones who can fix the problems.
We have previously set out our three key complaints about the actions of Government:
- Delivering a scheme that is retrospective, rather than a prospective scheme, as proposed by both the 2017 Ramsay Inquiry and the Hayne Royal Commission.
- Only picking up the cost of the first three months, when having previous committed to paying for the cost of operations and claims for the first 12 months.
- A complete failure in the disclosure on the cost of the CSLR and avoiding doing an Impact Analysis.
In this further paper on the CSLR, we have set out our grounds for objection on these three key issues[1].
It is only the Government that can fix the CSLR problem. We are firstly calling on them to commit to not charging the advice profession more than the $20m sector cap in 2025/26 and then changing the law to overcome the design problems to ensure that it is equitable and sustainable.
The Government have been aware of the problems with the CSLR for a long time now, yet have failed to take action. The advice profession cannot wait until after the election. The Government needs to act now and commit to fixing the problem.
By Phil Anderson, General Manager
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