Speaking to members, the AIOFP criticised the idea of managed investment schemes (MISs) being excluded from the CSLR, arguing that it would go further than other professional groups and associations to address the issue.
Drawing on legal advice obtained by the association, Professor Mark Bowler-Smith, former London-based financial adviser and academic at Deakin University, said: “If MIS receives special treatment, AIOFP should not merely complain about the politics. We should immediately ask: what is the legal source of the carve-out, what reasons support it, what evidence was relied on, and whether the decision can be challenged in the Federal Court.
“A carefully chosen test case may not only challenge the exclusion itself but also force public scrutiny of how the CSLR burden is being allocated across the sector.”
Like many other associations across the financial sector, the AIOFP’s criticisms of the CSLR have been scathing, labelling it a burden to the advice profession, calling out its uneven levy model and calling for changes to how it operates.
“The CSLR should be a concept that is well received and accepted by all market stakeholders to protect consumers,” AIOFP executive director Peter Johnston said.
“Unfortunately, it is not. The CSLR would have to be the most heavily politicised and commercially dangerous piece of legislation in our profession’s history. Like most controversial proposed legislation, it starts life as a commonsense approach, but the political antagonists get involved with their own objectives, and it quickly turns into a dishevelled conflicted mess of self-interested and unfair outcomes for many.”
The often-controversial association laid out its legal strategy to members, highlighting it would choose the Federal Court as its means of legal challenge after receiving legal advice that a constitutional challenge would be too broad and unlikely to succeed.
Bowler-Smith said: “The stronger approach would be to say that any MIS exclusion or carve-out must be legally justified, evidence-based and procedurally defensible.
“If Government grants preferential treatment to one part of the financial services sector while leaving advisers exposed to the levy burden, the first step is to require written reasons, the evidentiary basis for the distinction, and disclosure of the policy criteria used to separate MIS losses from adviser-related CSLR liabilities.”
He added: “The practical position is ask the direct questions first; demand reasons and documents; identify the instrument or decision; then brief counsel on a targeted Federal Court challenge.”
Bowler-Smith added that if the questions are ignored, the next legal steps would be to explore a targeted challenge to the actual decision or instrument that gives effect to the MIX exclusion.
“Depending on how the exclusion is implemented, that could involve judicial review of the relevant ministerial, Treasury, ASIC or CSLR-related decision, or a challenge to the validity of the legislative instrument or levy determination.”
Johnston concluded that if MISs get a carve out of the CSLR levy, his association will be implementing Bowler-Smith’s recommendations “on behalf of the adviser profession”.
The AIOFP has been in full voice recently on other issues, such as calling on advisers to reject most retail managed platforms, calling the practices of those same platforms ‘cartel behaviour’ and outlining a 15 -point plan for the profession that included axing several professional associations.
Good works by AIOFP while FAAA sleeps 🙂
That’s laughable – all he does is beat his chest and achieve nothing. Trump style grandstanding.