Financial misconduct compensation scheme faces $170 million cost blowout

The Compensation Scheme of Last Resort faces a $170 million FY2027 funding shortfall after a surge in claims linked to the collapses of Dixon Advisory, First Guardian and Shield, prompting Treasury to consider expanding the levy base beyond financial advisers as the scheme prepares to process 1,567 claims and warns total eligible First Guardian and Shield payouts could reach about $900 million.

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