Two weeks after the official launch of the CSLR, Minister Jones has issued a statement, commending the Albanese government for its efforts towards “strengthening the financial system to provide victims of financial services misconduct with access to redress and compensation”.
Separately, on his LinkedIn profile, the minister posted: “In Melbourne this morning launching the new Compensation Scheme of Last Resort. It will support victims of financial malpractice who have no other avenue of redress. Thanks to the Australian Financial Complaints Authority team for the work to get this up and running.”
Expanding on his praise of the CSLR, the minister added: “The government stands with consumers to ensure there are robust protections in place for them.”
But while the minister pledges his allegiance to consumers, advisers are eagerly awaiting news on potential changes to the CSLR levy they are slated to pay later this year.
The scheme, first proposed by the 2017 Ramsay review and backed by the royal commission, actually launched on 2 April while Minister Jones was reportedly on leave.
Although the scheme is expected to encourage industry to support strong standards, enhancing trust and confidence in the financial services sector, for financial advisers, who are being asked to fork out $18.5 million for the first full year period, it’s a burden deemed unjust.
Last month, the CSLR revealed that the cost of the first levy period, which will be funded by the government, is $4.8 million, while the second levy is estimated at $24.1 million with much of the cost charged to advisers.
Since these costings were announced, the Financial Advice Association Australia (FAAA) has been vocal in urging the government to intervene, citing the unexpected scale of the levy and its focus on addressing legacy issues.
Joining the ifa Show podcast recently, the FAAA‘s general manager of policy advocacy and standards, Phil Anderson, said the FAAA wants to see the government pick up the entirety of the legacy Dixon Advisory matters.
“The business went into administration in January of 2022. The legislation for the CSLR was not passed until June of 2023, so nearly a year and a half later. It received royal assent in early July of 2023. We do not believe that this legislation should be applied retrospectively, and if we are required to pay for complaints that were submitted after the 7 September 2022, but before the legislation was passed, we think that’s wrong,” Anderson said.
“We think that there should not be a retrospective application of the law here. The vast bulk of those post-7 September 2022 Dixon complaints were received in September and into October of 2022. If you take out all of the Dixon Advisory matters, that would be a good outcome. That would significantly reduce the cost. But we would certainly argue that we should not be paying for Dixon Advisory matters that were received prior to royal assent in July of 2023.”
Moreover, Anderson pointed out the levy will only get higher in financial year 2025–26. Namely, according to estimates drawn up by the Actuaries Institute, the Australian Financial Complaints Authority (AFCA) will need until the March quarter of 2026 to complete the processing of legacy Dixon Advisory matters.
“We are talking about the prospect of an even larger number in the financial year 2026,” Anderson said.
“So, this is an issue that we need to argue strongly for, not only this year or the year that’s coming up, but the following year. So, it’s not just about $1,200. It’s probably significantly more in the 2026 year that we certainly want to see the government come to the party on.”
To hear more from Phil Anderson, click here.
As someone who suffered greatly due to shockingly poor so called “financial advice” I am so very grateful for the CSLR. We won an AFCA determination in our favour and then the company went into liquidation. The CSLR is exactly that for us – an absolute last resort.
I shouldn’t have to fund the Dixon cases. It had zero to do with me.
We are not a Dixon case
Don’t worry…..Thankfully all the Qualified Advisers will be exempt. Only the Unqualified Advisers will need to pay. I suggest you get qualified. Simple……you can see where this is going can’t you.
Oh nooooooo. Someone let the dogs out!
It’s not the Labor Party. It’s the Liar Party!
For someone who stated very clearly they would fix things when he needed votes, it has turned out that Jones is nothing but a liar and a pretender who is incompetent.
There is no doubt he will eventually be given a high level position within the Industry Fund sector, just like so many other Labor Party operatives previously.
And this has come as a surprise to you?
Anyone ever notice the poster on here called Hedware and how his posting stopped as soon as Jones got into office. Was it him? They both have it in for advisers, support industry super and had little idea about the commercial and compliance reality that comes with running a FP business.
Seems likely. Ethics?
if this thinking continues there will be no advisers. Other than qualified advisers who work for funds aligned to alp industry
Don’t use the phrase qualified advisers even though your point is valid. It’s an inexcusable term doesn’t need to be incorporated. More like unqualified sales people
“The government stands with consumers to ensure there are robust protections in place for them.”
Absolute rubbish. Consumers are far worse off now than they were 5-10 years ago. Instead of protecting consumers, governments and regulators have mounted an enrelenting persecution campaign against professional licensed advisers. They have pushed consumers away from professional advice, into the clutches of scammers and product floggers. CSLR is just the latest chapter in this persecution campaign. It will make it even harder for consumers to access professional advice, and will push even more consumers into harm’s way.
Funny how the minister only seems to be interested in advisers during election campaigns.
“Thanks to the Australian Financial Complaints Authority team for the work to get this up and running.”
And thanks to the lucky bunny advisers who have to fund it out of their own pocket.
Jonesy is nothing but an Industry Super puppet.
Killing Real Advisers at every turn and setting up Industry Super with Uneducated, Unqualified, Back Packer Call Centres Flogging Single Products Sales.
No ASIC Levy, No CSLR Levy, No Compliance, No Rules Sales.
Regulatory Capture Corruption yet again.
Jones posturing ignorantly again.
The government knows full well the quantum of future complaints, basic even encouraged people to apply knowing it would later be funded by the small remaining advisers. It’s disgusting, obvious and pathetic