Super scams First Guardian, Shield cause compensation cost blowout

Financial misconduct compensation scheme faces $170 million cost blow out Thu 2 Jul 2026 at 12:00pm A government scheme that provides compensation for victims of financial misconduct, including to Australians who lost their retirement savings in the First Guardian and Shield super disasters, faces a funding shortfall of $170 million. The Compensation Scheme of Last Resort (CSLR) was introduced after the banking royal commission and is supposed to help consumers recover money when a financial firm has become insolvent or refuses to pay determinations made by the Australian Financial Complaints Authority (AFCA). But the scheme is capped at $150,000 per claim and funding for it has fallen well short of what is needed to cover victims in the recent high-profile financial collapses of First Guardian and Shield, as well as the previous Dixon Advisory collapse. New CSLR figures reveal that the government needs to raise $190.3 million to fund all financial advice claims. The CSLR currently only has about $20 million from levies corporate watchdog ASIC has raised, but needs an additional $170 million to meet the shortfall, largely driven by the rise in claims at AFCA and the First Guardian Shield collapses. More to come.