During a webinar hosted by the Financial Advice Association Australia (FAAA) on Tuesday, Phil Anderson, the association’s general manager of policy, advocacy, and standards, emphasised that Minister Stephen Jones has developed a greater understanding of the advice profession’s concerns regarding the Compensation Scheme of Last Resort (CSLR).
Later that day, Anderson further elaborated that the meeting with Jones took place on 14 August, during which Jones recognised the urgent need for action.
“The minister was open with us; he accepted that there was a problem, he knew it needed to be addressed, he just made it clear that he had no immediate lever to pull,” Anderson said.
“However, he did agree to the establishment of a working group where the FAAA is working with Treasury. We’ve already identified a list of suggestions; we’ve put those proposals to them.”
Anderson also shared that during the August meeting, they discussed the public inquiry, receiving broad support from Jones.
“We got his broad support that he would be happy to have that happen,” he said.
The general manager also emphasised that the advice community has a valuable opportunity to leverage this issue as the federal election approaches.
“We want to make sure that it can play a role when we get to the election next year about what each side of politics is going to do to fix it,” he said.
Last week, it was revealed that the economics references committee will scrutinise the collapse of Dixon Advisory and its impact on the CSLR after a motion moved in the Senate by Senator Pauline Hanson secured cross-Parliament support.
The FAAA has been advocating for an inquiry since earlier this year, pressuring politicians through a letter-writing campaign that resulted in 2,827 letters sent to MPs across all parties and 21 meetings with lawmakers.
Anderson explained that the inquiry is key for uncovering the truth behind the Dixon Advisory collapse, exposing significant design flaws in the CSLR and probing the Australian Securities and Investments Commission’s (ASIC) role in the debacle.
“We want to make it really clear how unjust this is for this to be charged to the advice profession,” Anderson said.
“And we want to ultimately have this inquiry identify the changes that are needed to fix the problem.”
E&P won’t escape scrutiny with delisting
Also on Tuesday, the parent company of the collapsed Dixon Advisory, E&P Financial Group, announced it is seeking to delist from the ASX after unspecified regulatory proceedings significantly impacted its share price.
E&P acknowledged the Senate inquiry in its ASX filing, stating: “The motion is relevant to E&P as it references E&P subsidiary Dixon Advisory & Superannuation Services Pty Limited as an example”.
But it added that the company has “no further detail on the proposed inquiry and is unaware of the extent to which it may or may not be involved in the inquiry”.
Commenting on E&P’s ASX exit, Anderson said he doesn’t think E&P will manage to escape scrutiny by pursuing this move.
“I don’t think they’ll avoid scrutiny. I think there will be less scrutiny going forward if they’re not required to report to the ASX, but in terms of this parliamentary inquiry, it doesn’t matter if they’re listed or not,” Anderson said.
“The Senate economics committee will be having a close look at the action of Dixon Advisory and therefore their parent company E&P Financial Group.”
The inquiry is scheduled to report by the last sitting day of March 2025.
Headline “CSLR election battleground”… just surveyed 10 people in my street and not a single person knew what the CSLR was and when told them what it was they all supported it. Doesn’t make it right or wrong but if as an industry we want to make it an “Election Battleground” we might not like what the everyday punter says.
I don’t support the current gov as doing everything right but don’t think for a minute Libs did a better job when they were last in power… be careful what we wish for…
Both major Political Parties know that since 2004, ASIC was not funded to do supervision. DIXON failure was “putting $350 million eggs in one basket”, that was simply wrong. There should be a Federal Court Case for a decision to unwind ALL related transactions going back 7 years limit under the Statute of Limitations, not put $350 million into CSLR retrospectively. Politicians are culpable and ASIC should be asked before the Federal Court “Was ASIC funded by Treasury to conduct active supervision of appropriate strategic diversified investment advice and management by handling client funds?” The majority of FAR listed advisers never ever handle client funds, due to the high prevalence of frauds. Also, when ASIC imposed fines and penalties, it was not offset against 2022-23 IFM financial adviser levies of $44.6 million, but put into Treasury General Revenue, so Treasury was making 1.6 times ASIC’s enforcement costs [quote from Hon Stuart Robert, early 2023]. Phil & Michelle know Treasury is doubling up on wrong doers, forsaking its victims and levies on innocent financial advisers, and the money does not go back to ASIC for active compliance supervision and ASIC does not do rehabilitation courses on wrong doers so they can become good compliance advocates thereafter. Again, Minister Jones has no financial law qualifications and experience, because Politicians get promoted on political seniority or ‘last man standing’, to then be misled by the ‘Canberra bubble’.
So Jones only speaks to the FAAA? If he wants to speak to the industry why does he limit his dealings to just one person acting for one group? Setting up a working group with FAAA and Treasury is still ignoring a lot of people. Does no one else get a voice?