A Royal Commission is “too far into the future” for clients affected by the Commonwealth Financial Planning scandal and an alternative review process should be arranged, according to law firm Maurice Blackburn.
Speaking to ifa, Maurice Blackburn partner John Berrill - who gave evidence to the senate inquiry into ASIC’s handling of CFPL - said that while the report was a positive outcome both for consumers and the finance industry, compensation needs to “start now” for affected clients of CFPL.
“I think it needs to be fixed and it also needs to be done quickly and I think the Royal Commission is just too far off,” Mr Berrill said.
“These are people who have saved for their retirement, built up their retirement to have lost half of it or more, so they simply don’t have enough money to live off.
“For them, the sooner this thing gets resolved the better… and royal commissions just don’t do things that quickly.”
Maurice Blackburn acted for dozens of investors involved in the scandal and Mr Berrill gave evidence on the “flawed” compensation regime agreed between ASIC and CFPL for affected clients during the senate inquiry.
Under this regime, many victims may not have been correctly compensated during the compensation process, he said.
Instead of a Royal Commission, Mr Berrill agreed with a recent proposal by ASIC, who indicated that it plans to set up a new compensation review process for affected clients.
“I think a new review process needs to be set up under which the CFPL must tell people to go and get independent advice,” Mr Berrill said.
“Of course, the devil will be in the detail but if there is to be a review process set up it should be done sooner rather than later; the royal commission as a vehicle takes too long.”
“If ASIC is going to set something up now, then great.”
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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