Govt and Jones ‘lazy’ on CSLR legislation

Mike Taylor

Managing Editor and Publisher

16 May 2024

A senior financial planning licensee has laid bare her views on the funding arrangements for the Compensation Scheme of Last Resort describing them as unconscionable.

Less than a week after licensee heads at Financial Newswire’s Advice, Wealth and Super Conference expressed their abiding anger at the CSLR funding methodology, Clime Investment Management chief executive, Annick Donat has taken to social media to state: “The decision by the government to penalise every adviser for the inadequacy of conduct from Dixon Advisory and others is unconscionable”.

Clime Investment Management is the parent company for financial planning firm, Madison.

At the Advice, Wealth and Super conference, Infocus Wealth Management managing director, Darren Steinhardt expressed his continuing anger at the cost of the CSLR to the advice industry alongside other regulatory funding obligations.

As well, the Financial Advice Association of Australia (FAAA) expressed its disappointment that the Budget had not addressed the cost of regulation to the advice profession.

For her part, Donat told Financial Newswire that it was time for people to gain a greater understanding of where their money was being invested and to accept some responsibility.

“The Corporations Act already defines obligations between an adviser and client. The risk regime includes PI insurance & ASIC levies,” Donat said.

“CSLR is lazy legislation by [Financial Services Minister] Stephen Jones and the government. The expense to advisers will flow on to clients and once again make advice inaccessible,” she said.

“I am not an adviser but I am married to one. He has spent 34 years building a business which has helped so many Australians. To add any more cost to his (& the advisers in his business) is disrespectful.”

“So how do we respond? I don’t have a solution but I believe if every adviser explained to their clients the CSLR legislation, the proposed levy (which will increase) and the ASIC levy and PI and what this means to the cost of advice, I have no doubt the clients would be disgusted,” Donat said.

“It’s akin to asking Telstra to pay for Optus’ data breach, or (insert credit provider) to pay for Latitude’s breach…or asking your neighbour to pay extra insurance premiums in case your house is robbed. It’s ridiculous.”

“Speak to your clients, get them to voice their concerns & perhaps together we can stop the stupidity.”