SMSF Association Submission
Chartered Accountants Australia and New Zealand, CPA Australia, the Financial Planning Association, the Institute of Public Accountants and the SMSF Association support the implementation of a ‘true’ compensation scheme of last resort (CSLR).
We believe it is essential that there is an appropriate external dispute resolution (EDR) framework for the financial services sector that ensures industry participants are accountable for the financial products and advice they provide. The framework should appropriately protect consumers and, where necessary, allow them access to adequate compensation and redress.
However, we have significant concerns with the design of the CSLR proposed in the exposure draft regulations.
In particular, we have significant concerns that the proposed framework is being modelled on a system that is not fit for purpose, noting the current ASIC Industry Funding Model (IFM) is under review to ensure it is actually an equitable and appropriate model for the longer term. As we are seeing with the ASIC IFM, those who give rise to claims may not be contributing to the levy depending on a range of factors, including the timing of when they held or cease to hold their AFS licence.