This week, consumer advocacy group CHOICE called out the government for the delay of the CSLR — which aims to provide limited compensation where a determination issued by the Australian Financial Complaints Authority (AFCA) that relates to a financial product or service remains unpaid — and the Financial Accountability Regime (FAR), with a new survey showing overwhelming support for the reforms.
Eighty-one per cent of the Australian respondents agreed that victims of finance investment schemes should receive compensation and 73 per cent said they support a compensation scheme for victims.
CHOICE banking policy adviser Patrick Veyret said it’s time for the government to act.
“Justice delayed is justice denied. Over 1,300 people have had their complaints and compensation award[s] paused until the government passes the scheme,” Mr Veyret said.
“People have lost their entire life savings and are stuck in limbo. For many, compensation is the difference between living a secure retirement and facing a life on the aged pension in the insecure private rental market.”
The survey comes only weeks after CHOICE, alongside other groups including the Association of Financial Advisers (AFA) and the Financial Planning Association of Australia (FPA), called for a strengthened CSLR.
The proposed scheme currently only applies to five financial products and services: personal advice on relevant financial products to retail clients, credit intermediation, securities dealing, credit provision, and insurance product distribution.
However, the government is now being urged to expand the scheme to provide compensation for all financial products and services that fall under the jurisdiction of AFCA.
Mr Veyret added that the FAR, which will apply to insurers and superannuation entities, “will hold finance executives to account”.
The bills are expected to be debated shortly, following the government’s announcement that it intends to pass both by the end of 2021.
“By passing these two important laws, the federal government has an opportunity to right some of the wrongs of the banking royal commission,” Mr Veyret said.
So when there are 5000 advisers left in 2026 and some scammer rips off 5000 Australian consumers, then the compensation scheme should be able to look at decimating the life savings of those 5000 professional financial advisers to compensate the 5000 consumers who were scammed and lost their life savings (and who were probably greedy and unadvised)…
Spare us the “justice” sermons please. Most financial advice regulation of the last 10 years has had nothing to with justice and everything to do with indiscriminate revenge. It is about punishing the innocent, honest, majority for the crimes of a guilty minority. A guilty minority that has largely moved on to other less regulated areas, where they can harm consumers all over again.
The average financial advice consumer is now far worse off than they were 10 years ago. Regulatory cost and complexity has made it much harder for consumers to access professional advice. Meanwhile unregulated shonks have flourished. Consumers have been badly let down by so called “consumer associations”.
True you are
But at least in this case Choice are like almost everyone else and calling for Banks & Products providers to be included on the CSLR.
The only ones not wanting to include the Banks & Product providers are Mr I Hate Advisers and Love Banks Frydenberg & Ms Robo Advice for Banks Hume.
And Choice are actually also saying where is the Banks & Product providers Financial Accountability Regime (FAR).
So for once Choice is actually doing a good thing.
But as bloody usual Frydenberg, Hume & LNP will never do anything against the banks.
OUT WITH FRYDENBERG
OUT WITH HUME.