No Parliamentary Budget scrutiny for AFCA despite CSLR
The Australian Financial Complaints Authority (AFCA) will be one of the central elements of the compensation scheme of last resort (CSLR) but it will not be made formally subject to Parliamentary Committee Budget oversight unless it wants to be.
The Federal Treasury has made clear that because AFCA is not directly funded by the Commonwealth, it is not compelled to appear before Parliamentary committees and that where AFCA has appeared, it has done so voluntarily.
The Treasury has been asked by a Federal Opposition Senator, Andrew Bragg whether AFCA should be required to appear before Senate Estimates “given that it holds the Government’s approval to operate the external dispute resolution scheme detailed in the Corporations Act”.
Bragg also asked in the context of AFCA’s role be expanded following the establishment of the CSLR.
However, the Treasury stated bluntly that “AFCA is an independent non-government entity”.
“It is a not-for-profit company limited by guarantee that does not fall under the Public Governance, Performance and Accountability Act (2013),” Treasury said. “It is not publicly funded, that is, it does not receive an annual appropriation.”
“Senate Estimates is the examination of the particulars of proposed expenditure. As AFCA receives no funding through the appropriation bills, we do not consider it appropriate for AFCA to attend Senate Estimates,” Treasury said.
However, it noted that AFCA had made itself available for Parliamentary scrutiny before committee hearings and had appeared before nine Parliamentary Committees since being established in 2018.
Senator Bragg and other members of the Senate Economics Legislation Committee had also raised questions about AFCA’s role with respect to the CSLR and the manner in which the Australian Securities and Investments Commission (ASIC) had on 3 August, this year, issued a media release urging former Dixon Advisory clients to consider lodging complaints with AFCA.
That media releaser suggested that “former clients of Dixon Advisory and Superannuation Services Pty Limited may be eligible for compensation under a potential Compensation Scheme of Last Resort but they will need to take action as soon as possible”.
The ASIC media release said that as the regulator would be writing to clients of Dixon Advisory to inform them that if they believed they had suffered loss as a result of the misconduct of Dixon Advisory and/or their former Dixon Advisory financial adviser in providing they financial advice, they should make a complaint to the Australian Financial Complaints Authority”.
“As complaints may only be made against firms who are members of AFCA, complaints against Dixon Advisory should be made as soon as possible. If Dixon Advisory’s AFCA membership ceases then no further complaints can be accepted.”
AFCA a Kangaroo court approved by Govt / Treasury but with no actual ownership of what it does or how.
AFCA has no costs to vexatious complainers that can keep complaining until AFCA gives in an award $$$ compo to get rid of them, regardless of complaint merits.
AFCA follow no legal precedence.
AFCA often lack natural justice.
How do Advisers still have to deal with AFCA, yet now there is another Regulator, the so called Single Disciplinary Body ???
OVER REGULATION TO DEATH.
Now add more with CSLR.
What a pathetic cop out by Treasury. AFCA is a rogue regulator that persecutes financial advisers and encourages vexatious complaints. AFCA has extreme powers bestowed upon it, and financial advice licensee “membership” of AFCA is legislatively compulsory. AFCA ultimately makes it harder for consumers to access affordable professional advice. How can AFCA possibly be so unaccountable, given the power they have and the damage they cause?
Financial advice should be removed from AFCA’s jurisdiction entirely. Financial advice has more than enough other regulators, including the ludicrously named “Single” Disciplinary Body.
Well, it looks like every adviser is about to get shafted big time when AFCA reward Dixon Advisory clients compo.
Well those Advisers left.
Dixon’s won’t be paying the bills.
And the Dixon bosses that knew the crap they had created, floated it, cashed in massively and then bail.
They should be criminally charged and fund all compo payments.
They won’t be though will they, we will fund the asic side of litigation through the levy and pay more for the CSLR while Afca handle complaints they promoted to be lodged by cut off. It’s not a joke it’s a specious considered way to tax a profession which is struggling over regulated hemorrhaging experienced practitioners.
Why are Financial Advice Professional Bodies so impotent and useless?