Industry data support concerns about a shrinking talent pool. The Financial Adviser Register shows a fall from roughly 26,500 registered professionals in 2019 to about 15,300 in July 2025—an attrition rate of more than 40 percent. If the levy reaches A$127 million and adviser numbers stay constant, CPA Australia calculates an average annual impost of around A$8,300 per adviser.
The CSLR and its Purpose
The CSLR was introduced to compensate retail clients who obtain a court or Australian Financial Complaints Authority determination in their favor but remain unpaid because the relevant advice firm has become insolvent. Funding comes from a levy imposed on licensed financial advisers, product issuers and other entities regulated by ASIC.
Under legislation passed in 2023, the scheme is designed to be industry-funded, with government contributing only to the initial capital pool. A statutory review scheduled for 2026 is meant to assess whether the settings remain appropriate. CPA Australia argues that timetable must be brought forward so any structural flaws can be addressed before further cost blowouts affect advisers and consumers.
Impact on Advisers and Clients
Accounting and advice groups say advisers face higher professional indemnity insurance premiums, additional education standards and compliance obligations that were introduced across 2024-25. The prospect of a sharply rising CSLR levy, they argue, could accelerate exits from the profession. Fewer advisers would in turn reduce competition and raise fees for clients, particularly those with modest portfolios who already struggle to obtain low-cost advice.
CPA Australia belongs to the Joint Associations Working Group, an alliance of ten industry bodies that advocates for policy settings aimed at widening public access to professional advice. The group contends that a more predictable, actuarially sound levy—ideally one with a legislated cap—would distribute costs fairly without jeopardizing the viability of small and medium-sized practices.
Webb maintains that most advisers on the register have complied with the law and should not be asked to carry an outsized share of compensation expenses stemming from misconduct by a minority of failed firms. He is urging the federal government to examine alternative funding models, including wider contribution bases or tiered levies linked to risk.
Broader Economic Context
In recent submissions to policymakers, CPA Australia has also highlighted the importance of strengthening trade and investment ties with Asian economies. The organisation warns that limited engagement could constrain growth opportunities for Australian businesses in key regional markets. Although separate from the CSLR debate, CPA Australia sees both issues as part of a wider agenda to ensure domestic firms remain competitive and well supported.
ASIC maintains oversight of the CSLR mechanism as part of its broader mandate to promote investor confidence and market integrity. More information on the regulator’s role is available on the official ASIC website.
With the next financial year’s levy already set at more than three times the original statutory cap, industry representatives are expected to step up lobbying efforts ahead of the 2026 review. Advisers are watching closely for any indication that government might intervene sooner to adjust the scheme’s funding formula and ease near-term cost impacts.
Crédito da imagem: The Accountant / GlobalData
