The FAAA has been advised it will have the opportunity to work with Treasury to address unintended consequences of the Compensation Scheme of Last Resort after meeting with Minister Stephen Jones to raise its concerns regarding the scheme.
The association says in a statement that during the meeting with the Minister CEO Sarah Abood and chair David Sharpe raised a number of issues including the total cost of the scheme, and whether it is operating as a true last resort.
Abood says they have told the minister that although they support the scheme, the funding model is completely unsustainable.
“The financial advice profession does not have the capacity to pay compensation to the clients of large listed entities which have done the wrong thing, and nor should we. We are looking at losses approaching $135 million for Dixon Advisory alone, with nothing in place to stop similar situations happening in the future.”
…the Minister has clearly heard these concerns and is genuine in his intent to work with us…
She says the association believes the Minister has clearly heard these concerns “…and is genuine in his intent to work with us to ensure that the CSLR achieves the goal that we all support.”
“He has advised us that the FAAA will have the opportunity to work with Treasury to outline unintended consequences of the CSLR and listen to pragmatic and feasible solutions.”
Abood adds they have also called on the government to pursue a public inquiry into what really happened at Dixon Advisory.
“With potential losses approaching $400 million, there is a clear public interest in understanding what has happened and how similar situations can be prevented in future.”
Meanwhile, in an open letter to the FAAA membership Abood said they left the meeting ”…with the Minister acknowledging that he had heard our worries and admitting that there were problems with the scheme that needed to be fixed.”
Of the FAAA working with Treasury, AFCA and CSLR to identify the problems and recommended solutions, she says this “…presents a genuine path forward. Members interests will now be central to the solutions for the scheme with a government that has listened to our anger and our advocacy.”
She also thanked members who had contributed to the CSLR advocacy campaign saying “…there is no doubt that the over 2,750 letters recently sent by our members to politicians of all persuasions has had an impact in ensuring our advocacy is heard in Canberra.”
The Minister is walking both sides of the street.
Jones is not in control of the situation, Treasury is, and advisers all are thinking there are vested interests at work there, and elsewhere. There appears to be a sound basis for that opinion.
Jones is just stalling until the election, when he is hoping to be hauled up the greasy pole of ministerial promotion. I hear the sounds of hands being cleansed in a bowl of water.
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In the meantime the PUBLIC agitation from all interested groups must continue. We need a public enquiry on how the CSLR went from the form it had under Morrison to what it is today.
All hands to the wheel folks! We can't sit by and watch this thing drift.
What the FAAA need to understand and I HOPE they do understand, after everything that the Government has done to the Financial Planning and Advised Life Insurance sector, is that the Government has had 10 years to address real and perceived problems and to a large extent, have failed to do much that has and will be a positive for just about everyone, except for Lawyers, Regulators and Public servants, whose lives are nothing but endless meetings on subjects they do not understand, though because this always has been and still is a great way for them to make money, they continue to get Billions more from the Government coffers to pay the Regulators and army of Public servants, so NOTHING WILL CHANGE and the FAAA will continue to have more and more and more meetings with these vested interest brigades who NEVER have had the correct solution and NEVER will.
It is so naive to assume that after explaining the blindingly obvious to these Institutionalized people, that they may have an epiphany and hallelujah, they will see the light and find the solution.
They prefer to work in the dark and find "their" solution which over the last 10 years results, has shown what I have been saying for 10 years, has been nothing but more money for them at ALL our and all Australia's expense.
I crystal balled what would happen and I invite everyone to look at what I have written over the years and compare the results of the fiasco that ensued when we looked to Government, Public servants and vested interest groups to find solutions, which has been an unmitigated disaster.
The only way to fix a problem, is to first recognise that it is a real problem, then find the solution from the people on the ground who have an incredible wealth of experience and ask for submissions to fix the issues.
The most important part of the solution is to not ask any Public servant or Lawyer for advice as they have NEVER fixed anything, except to feather their own nests.
Once solutions have been collated from true experts, then an open forum can be put out for the world to see and decided upon, then instead of the current closed door, "you scratch my back and i'll scratch yours," maze of red tape that to now has always flowed through which has NEVER been a good result for the majority, we should start finally heading down the right track.
If we want results, do not ask for advice from Government or any Public servants, just tell them and demand that as an Industry, we will no longer put up with what they have been dishing out and going forward, there will be a congo line of litigation against the Government and demands for all Government ministers and Public servants who do the wrong thing, to be sacked.
This may sound harsh, though look at what we and all Australians have had to endure with Government interference that has caused multi-Billions of dollars of Tax payers money, been given to self-serving entities and millions of Australians harmed by incomprehensible and stupid regulations.
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