AIOFP questions decision to exclude banks from CSLR
The Association of Independent Financial Professionals (AIOFP) has written to Parliament questioning whether the minister of financial services and the Treasurer’s pre-politics careers influenced the decision to exclude the banks from the compensation scheme of last resort (CSLR).
Peter Johnston, AIOFP executive director, said Senator Jane Hume and Treasurer Josh Frydenberg both had strong ties to the banking sector.
“Considering the Minister and Treasurer’s pre-political career was with the banking sector, this does not pass the pub test,” Johnston said.
“It seems the Minister has forgotten that consumers allowed her into parliament to act in their best interests not the banks.”
Johnston said the decision for Hume, the minister for financial services, superannuation and digital economy, to defy the Royal Commission recommendations was odd.
“Considering losses from managed investment schemes associated with banks and other institutions is the greatest negative issue for consumers over the decades and 98.5% of all complaints lodged with the Australian Financial Complaints Authority (AFCA) are about poor treatment by banks and other institutions in 2020/21, why would the Minister want them excluded?” Johnston said.
“In addition, the CSLR start date of 2009 is to help consumers defrauded by a poorly managed investment scheme, why does the Minister not want to help them? Surely the best interests of consumers comes first?”
Johnson said this was why a Federal Independent Commission Against Corruption (ICAC) to investigate whether questionable behaviour that was not in the best interests of consumers was needed.
“The track record of a number of Coalition Politicians in recent times is not a good look,” Johnson said.
“Christian Porter’s Blind Trust, Bridget McKenzie’s Sports grants, Susan Leys travel expenses and Stuart Robert’s dealings with a Chinese billionaire are all decisions that deserve further scrutiny.
“The advice community finds it quite ironic that this Government imposes an ethics regime on our industry and the Prime Minister chooses not to impose one on his own team.”
AUTHOR
Chris Dastoor
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
