David Berry

Approximately $11.5 million of the $18.5 million charged to the advice sector in FY25 will be paid out for compensation, with the rest covering various operating expenses.

The advice sector will cover $9.43 million for Dixon Advisory, along with $2.11 million for other complaints. The rest of the levy will cover AFCA fees, capital contributing from industry and CSLR operating costs, and ASIC costs.

The other $7 million includes AFCA fees ($1.98 million), CSLR operating costs ($4.72 million), capital contribution from industry ($417,000) and ASIC costs ($361,000).

Despite the advice sector covering almost $5 million in CSLR operating costs, the other three subsectors will only account for under $600,000 each, due to a “material portion” of operating costs in the first and second levy period include time spent on pre-CSLR claims, namely Dixon Advisory claims.

During the media briefing in the lead up to commencement of the scheme, CSLR chief executive David Berry noted during FY25 a significant portion of compensation payments (around 80 per cent) would be related to Dixon Advisory.

Berry said that amount was based on a number of assumptions that are expected to “firm up” once the CSLR starts seeing claims come through.

“We are expecting to see… about $12 million in compensation payments in the next financial year,” Berry said.

The backlog of Dixon cases that will end up being covered by advisers has drawn heavy criticism for the industry.

According to estimates from the actuarial consultancy, Finity, which has been engaged by CSLR to help determine the amount of those payments, 1643 of the 2054 of the claims paid will be Dixon related, with some of the work spread over multiple years.

At the same time, Berry stressed that although Dixon’s case was “the largest event”, there would be other firms expecting to receive payments as well.