“The rate and scale of firm failures aren’t slowing,” said CSLR chief executive David Berry.

“The number of impacted consumers continues to rise, and the proportionate negative impact caused by a relative few remains significant.”

Across the subsectors, there are a total of 912 claims in the FY27 estimate – 841 of which fall under the financial advice banner.

As the expected amount for the personal financial advice sub-sector will exceed the $20 million cap, a revised estimate will be completed in June 2026 that will allow the CSLR to request a special levy for the FY27 period after 1 July 2026.

There is still no detail on how Financial Services Minister Daniel Mulino will deal with the special levy for the FY26 period, with the public consultation that was set up in August to help determine how the $47 million above the financial advice subsector cap will be paid as yet unresolved.

Dixon Advisory has retaken its position as the top cause of compensation payments at $54.76 million, while the largest financial firm in terms of compensation for FY26, United Global Capital, was in second slot at $24.66 million. Brite Advisory accounts for $8.82 million, while all other firms make up the final $21.71 million.

The cost of operating the CSLR also contributes to the levy, making up $6.6 million in the total levy and $2.66 million of the financial advice levy. ASIC costs of $1.2 million are also included, with $525,000 of that being attributed to advice.

Far outstripping either of these bodies is the costs to cover the Australian Financial Complaints Authority (AFCA), which totals just over $20 million in FY27 – enough to make up a subsector all to itself.

Given the vast majority of the claims are related to financial advice, so too is the bulk of the cost for making these determinations. In all, AFCA fees for the period are estimated at $18.76 million.

Shield and First Guardian numbers ‘uncertain’

While the estimated levy for FY27 is around $60 million higher than in FY26, the number does not include the high profile and large-scale Shield and First Guardian failures.

“Right now, there are too many uncertainties to reliably estimate the potential impact of Shield and First Guardian on the Scheme,” Berry said.

As a result, and based on the limited information currently available, the CSLR and its independent actuary said they anticipate that the FY27 revised levy estimate may be higher than the estimate published today.

Speaking with ifa, FAAA general manager of policy, advocacy and standards Phil Anderson said the number is not surprising given the information in the revised FY26 document released in July.

“We are very conscious that it’s quite explicit that when they do the revised estimate, they will more than likely take into account some Shield and First Guardian costs, and thus they expect it to be a lot more than this first round,” Anderson said.

One of the factors complicating the estimate is how much of the invested funds will be recovered from other sources, which the actuaries report noted “cannot be reliably estimated at this stage”.

According to the report, AFCA has indicated that it intends to stand up a “new dedicated workforce to address these complaints”, which would provide the capacity to deliver around 100 additional determinations per month “once fully operational”.

“For a complaint to be eligible for compensation from the CSLR, it needs to be against a financial advice provider and that [advice] firm needs to not pay the AFCA determination (typically because it is in liquidation),” the report said.

“Some financial advice firms that advised clients to Shield and First Guardian remain solvent, and they would be liable to pay its AFCA fees and any adverse finding by AFCA.”

Blake Briggs, CEO of the the Financial Services Council said the FY2027 estimate again includes another significant breach of the financial advice sub-sector cap, this time by a staggering $106.9 million.

"Without urgent reform to the CSLR’s design, special levies on industry will again be required to meet the gap for the foreseeable future," he said.

“This is another blow to law abiding financial advice businesses who face continued cost pressures and who will again be called on to pay up to the $20 million sector sub-cap, and potentially above it, for the wrongdoing of others."

He added that the FSC opposes normalising the use of "special levies" as a routine funding mechanism noting that special levies are inherently unpredictable, undermine industry confidence, and function as a de-facto tax on business.

“The wider financial services sector is willing to do its part to meet the existing shortfall, provided the costs are distributed widely and fairly. A diversified approach avoids disproportionate impacts on individual subsectors and reduces the risk of cross-industry disputes," Briggs said.

“However, socialising the cost of underwriting investment losses is not a sustainable long-term solution for a scheme that is on track to have continued cost blow outs into the foreseeable future.”

The FSC urged the assistant treasurer to set out a clear pathway for reform to ensure the scheme is sustainable for the consumers who need it and aligned it to its original policy intent to provide compensation as a last resort.

Sarah Abood, CEO of the Financial Advisers Association Australia, said the latest estimate from the CSLR is very large and will only get worse once the situation with Shield and First Guardian is better understood.

"This puts a focus on the need to address sustainability of the CSLR as well as the need for greater certainty with respect to the funding," she said.

"We have been saying for some time that it is imperative that financial advisers should not pay more than the $20 million sector cap which is already very high, particularly when you bear in mind that the vast majority of this levy is paid by small, privately owned firms with very limited capacity to absorb extra costs. We urge the government to make urgent and significant changes to the CSLR to ensure fairness and sustainability.”