FAAA submissions on CSLR and Shield and First Guardian

On Friday 22 May 2026, the FAAA provided the following three submissions to Treasury in response to the Government’s consultation on the CSLR and Shield and First Guardian:

• Compensation Scheme of Last Resort (CSLR): Reform options to support ongoing sustainability
• Enhancing member protections in the superannuation system
• 20260522-FAAA-Submission-on-Curbing-lead-generation-activity.pdf

We welcome consultation by the Government to address issues with the sustainability of the CSLR, and to fix any issues in the regulatory regime that contributed to the Shield and First Guardian collapses. We have welcomed a number of these proposals, including the removal of the ‘but-for’ test for CSLR payments and better enabling recoveries from corporate groups. We are also supportive of reforms to provide consumers with better protection in the context of predatory lead generation activity.

We have however called out a few key issues that any reforms need to address:

• As a small business sector, financial advice should not pay more than the $20m base annual CSLR levy.
• The AFCA Rules need to change to better allow consumers to make complaints about MISs and super funds, and to allow the apportionment of loss to other contributing entities.
• There is no basis for banning advice fees from super accounts for switching advice; this would be a huge problem for consumers as well as competition and costs in the superannuation sector.
• The current exemption from the anti-hawking laws for financial advisers is essential to enable them to contact their clients in time of need and should not be removed; we think the other measures proposed are more likely to be effective.

We will continue to work closely with the Government and other stakeholders as these reform proposals are assessed and progressed. This remains a high priority for the FAAA and we will keep members updated as this progresses.

If you have any questions with respect to these consultations or our submissions, then please contact the FAAA on policy@faaa.au.

Sarah Abood, FAAA Chief Executive Officer