ASIC continues to front-end load CSLR workload
It was a practice which the Australian Securities and Investments Commission (ASIC) commenced even before the legislative establishment of the Compensation Scheme of Last Resort (CSLR) and it is continuing – directing affected consumers how to lodge complaints.
It was the practice which saw complaints relating to the collapse of Dixon Advisory front-end load the CSLR, once it came into operation, and the regulator is similarly urging consumers impacted by the Shield Master Trust and now Global Capital Property Fund (GCPF).
When ASIC on Monday announced that it had banned gold Coast-based financial adviser, Andrew Rankin of Next Generation Advice Pty Ltd for four years, it also took the trouble to make clear to clients that they should act promptly to file a complaint with the Australian Financial Complaints Authority (AFCA).
While ASIC’s media release focused on the banning, it also pointed out that affected clients have until 17 October, this year, to lodge a complaint with AFCA before Next Generation is no longer deemed to be a member of the external dispute resolution (EDR) regime.
Not mentioned in ASIC’s explanation is that once a complaint is lodged with AFCA by affected Next Generation clients, the firm’s inability to pay any AFCA determination will ensure the matter is referred to the CSLR.
Next Generation Advice is in liquidation but has been required by ASIC to remain a member with AFCA until 17 October.
“If you are a client of Next Generation Advice and have concerns about the conduct of your adviser or the advice you received, you should consider lodging a complaint with the Australian Financial Complaints Authority,” ASIC’s announcement said.
“AFCA is the external dispute resolution scheme for financial complaints in Australia and must deal with complaints independently and fairly. AFCA’s service is free for consumers.”
As ASIC announced on Monday, it found Rankin failed to act in the best interests of a number of his clients and gave inappropriate advice while authorised by Next Generation Advice.
ASIC found Rankin recommended clients set up an SMSF and invest most of their retirement savings into the Global Capital Property Fund Limited (in liquidation) (GCPF) and the Pivotal Diversified Fund (Pivotal).
The regulator later noted that its investigation into matters connected to the GCPF and the Shield Master Fund is continuing.
ASIC can’t do their job to regulate dodgy advisers or MIS fraud & failures.
But ASIC are very happy to spend time and money advertising for innocent Advisers to pay for all the wrongs via CSLR.
Can it get any more useless and corrupted at ASIC ? They do just keep outdoing themselves with incompetent corruption, so yes it can get worse for Advisers.
ADVISERS ON MASS MUST REFUSE CSLR!!!
Lets have ASIC try to shut down the whole profession in one big hit rather than a thousand machete gashes.
I wrote this yesterday – I’d encourage advisers to read the positions of Alan Kirkland in his tenures before he became an ASIC Commissioner.
Kirkland , ex Choice CEO / activist, should never have been appointed commissioner.
Please save us the reading time Phil and give us a couple of main points
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I shall never forgive Frydenberg and the Liberals for creating the CSLR.
If anyone, product providers should be the ones funding it.
ASIC need to stop acting like a business and start acting like a regulator. Stirring up buses so it can justify it’s existence and steal from honest business owners via the CSLR is not on.
Why should as a business that always strives to do the right thing by being ethical and promoting ethical behaviour have to continually pay for the sins of those who don’t? It’s unjustifiable!!
ASIC need to understand that a new or emerging small business owner is adversely affected by the impost of CSLR and it more severely affects the smaller revenue base of a small or emerging adviser. The impact of CLSR on new/ emerging adviser might be 4-5% of their revenue where a larger business this cost may only be 0.5-1% p.a. ASIC need to look closer at the impact on new &/or emerging advice businesses as it deters the entry of new advisers to the business the way this is currently set up. In reality honest advisers should not be carrying this financial burden for the crimes of others at all!
Dear ASIC,
I often tell my clients that I don’t have a crystal ball to predict market movements. Now, I find myself needing to say the same to you.
It seems I’m being held responsible for identifying and preventing the actions of unethical or criminal advisers—something that is clearly beyond my control. The implication is that because I haven’t stopped them, I should now bear the financial burden of their misconduct. Am I mistaken? I don’t believe so, especially when I see the significant cost my business is now facing as a result.
Other professions are not being penalised in the same way, which leads me to wonder—do you believe I possess some kind of psychic ability? Let me be clear: I do not have a crystal ball, nor any supernatural insight. I am a professional doing my best to serve clients ethically and responsibly.
Please reconsider the fairness of making ethical advisers pay for the damage caused by those who have abused the system. It is unjust and unsustainable.