Call Senate CSLR inquiry witnesses ASAP says FAAA

The Financial Advice Association of Australia (FAAA) wants the Senate Economics Committee to ensure that Treasury’s review of the Compensation Scheme of Last Resort (CSLR) does not derail scrutiny of the scheme and how it was set up.

FAAA chief executive, Sarah Abood is urging the chair and deputy chair of the Senate Economics Committee to initiate the calling of witnesses to its inquiry into Wealth Management companies.

She said 1 February marked three months since the deadline for submissions to the Senate inquiry had closed “and yet no witnesses have been called and no appearance dates set”.

The Senate Committee Inquiry has received 16 submissions, and its terms of reference allow close examination of the actions of Treasury and the Australian Securities and Investments Commission (ASIC).

Importantly, the committee is chaired by NSW Liberal Senator, Andrew Bragg, with the deputy chair being Victorian Labor Senator, Jess Walsh.

Importantly, there exists a limited window for the Senate Committee to hear from witnesses with the Government having  already flagged that the Federal Budget will be handed down in March and with the Federal Election likely to be called shortly thereafter.

Referring to the Government’s announcement of a Treasury Review of the CSLR, Abood said this should not be used as an excuse to delay the Senate Committee’s inquiry into Dixon Advisory.

“The case had been made for the critical importance of this inquiry, and stakeholders have provided multiple submissions. There is much that still needs to be investigated. Senators Bragg and Walsh should call witnesses for this inquiry immediately.

“We have continued to unearth problems not only at Dixon Advisory but also at other firms where a variety of problems have arisen.

“Advisers are rightly angry that it now appears as though there is a continued effort to not delve into these issues, and to avoid a genuine investigation of where this has all gone wrong.  It is particularly critical to progress with this investigation now, in light of the estimates that the financial advice profession could end up paying an additional $50 million for CSLR next financial year, on top of the $20 million sector cap.

“The FAAA continues to advocate for members’ interests and has been calling on the government to fix problems with the CSLR since before it was legislated.”

“If anyone is in any doubt that there are problems with the way that the CSLR has been designed, and the potential implications emanating from not just Dixon Advisory but other firms, then they need only to read the submissions that have already been made.

“Much of the work to determine the problems with the CSLR has already been done, and it must not go to waste,” Abood said.