The FAAA has had its first scheduled meeting with Treasury to continue work on fixing the unintended consequences of the Compensation Scheme of Last Resort.
Sarah Abood, CEO of the FAAA, says in a statement there’s a number of outcomes the association is seeking, including addressing the ability of parent companies to place an advice subsidiary into administration and transfer business operations.
“There are a number of concerns that we are raising with Treasury to ensure the CSLR‘s funding model is fair and sustainable.”
It is also continuing to advocate for a public inquiry into Dixon Advisory.
“It is essential that we clearly understand what happened with Dixons so we can make sure a similar disaster doesn’t arise again,” Abood says.
The association notes this is the first of its scheduled meetings with Treasury following a meeting with Financial Services Minister Stephen Jones about the CSLR on 14 August.
Continued Push
Meanwhile the FAAA also says it has written to all federal members of parliament urging them to support a public inquiry into the collapse of Dixon Advisory and the effect it has had on the CSLR.
The association says in a separate statement that the call for a public inquiry comes in response to significant concerns regarding the treatment of Dixon Advisory’s collapse “…which left thousands of clients with losses potentially up to $400 million due to breaches of the best interests duty by Dixon Advisory and the failure of a related party product known as the URF (US Masters Residential Property Fund).”
It says as much as $135 million of this compensation bill could be charged to the financial advice profession, potentially costing all financial advisers more than $8,000 each and resulting in further increases to the already high cost of financial advice.
Abood says a public inquiry would provide “…clarity around the key questions that remain unanswered, including how the money was lost in the Dixon Advisory scheme, what role directors and senior management played, and why ASIC failed to adequately investigate and take action in a timely way, despite numerous complaints from as early as 2008.”
