Invest
Compensation scheme fails to protect Aussie investors
The FPA is concerned the government’s proposed CSLR model won’t provide adequate protection for Australian investors.
Compensation scheme fails to protect Aussie investors
The FPA is concerned the government’s proposed CSLR model won’t provide adequate protection for Australian investors.
The Financial Planning Association of Australia (FPA) has called on the government to expand the base of its proposed compensation scheme of last resort (CSLR) to reflect the jurisdiction of the Australian Financial Complaints Authority (AFCA).
Reacting to the release of the Senate economic legislation committee’s report, which recommended the passage of the compensation scheme of last resort in its current form, the FPA argued that expanding the definition was the only way to ensure the sustainability of the scheme for consumers and fairness for contributors.
In a statement on Tuesday (15 February), the FPA said that victims of financial misconduct who have received a determination from AFCA deserve access to compensation if their determination goes unpaid.
“In its current form, the model will limit consumer access to the scheme – leaving Australians unprotected if they invest in products such as managed investment schemes that later collapse,” Sarah Abood, chief executive officer of the FPA, said.
Ms Abood pointed to recent investigations and examples of financial wrongdoing that have highlighted the inadequacy of the government’s approach to the implementation of recommendation 7.1 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“The FPA, along with 14 other industry and consumer bodies, advocate for the expansion of the CSLR, and the Senate economic reference committee’s own report into the Sterling Income Trust recommends the same,” Ms Abood said.
“With the proposed CSLR model, the government has missed an important opportunity to ensure financial services consumers receive adequate protection.
“It has also failed to ensure that financial planners are not left facing all of the costs to establish and maintain a scheme that will only do part of the job.”
The government’s CSLR model has been widely criticised over its limited coverage of financial products and services.
According to critics, consumers who have invested in managed investment schemes, such as victims of the Sterling Group and Sterling Income Trust, have been hung out to dry.
About the author
About the author
Advice
Securing success: Top real estate investment courses in Australia
Real estate investment in Australia offers a pathway to financial growth and stability, attracting both novice and seasoned investors. Read more
Advice
Navigating the path to citizenship: Real estate investment visa in Australia
Australia's robust economy, high standard of living, and vibrant culture make it an attractive destination for many seeking a new home. Read more
Advice
Email phishing attacks skyrocket due to ChatGPT's influence, experts warn
The rise of Generative AI technologies like ChatGPT has been met with a dramatic increase in cyber threats, particularly in the realm of email phishing attacks. Read more
Advice
Real estate investment for foreigners: A guide to investing in Australian property
Investing in Australian real estate presents a lucrative opportunity for foreign investors, offering a stable and growing market with potential for high returns. Read more
Advice
Smart investing: Using a real estate investment calculator for Australian properties
In the dynamic world of Australian real estate, making informed investment decisions is paramount. Read more
Advice
Choosing between bonds and equities: What’s best for you?
Investing can be a daunting task, especially when faced with the myriad of options available. Two of the most common asset classes are bonds and equities, both with their own unique characteristics ...Read more
Advice
Macquarie responds to ASIC's Federal Court proceedings
The bank has responded to civil penalty proceedings commenced by ASIC. Read more
Advice
Macquarie Bank taken to court by ASIC
The corporate regulator has taken action against the bank. Read more
Advice
Securing success: Top real estate investment courses in Australia
Real estate investment in Australia offers a pathway to financial growth and stability, attracting both novice and seasoned investors. Read more
Advice
Navigating the path to citizenship: Real estate investment visa in Australia
Australia's robust economy, high standard of living, and vibrant culture make it an attractive destination for many seeking a new home. Read more
Advice
Email phishing attacks skyrocket due to ChatGPT's influence, experts warn
The rise of Generative AI technologies like ChatGPT has been met with a dramatic increase in cyber threats, particularly in the realm of email phishing attacks. Read more
Advice
Real estate investment for foreigners: A guide to investing in Australian property
Investing in Australian real estate presents a lucrative opportunity for foreign investors, offering a stable and growing market with potential for high returns. Read more
Advice
Smart investing: Using a real estate investment calculator for Australian properties
In the dynamic world of Australian real estate, making informed investment decisions is paramount. Read more
Advice
Choosing between bonds and equities: What’s best for you?
Investing can be a daunting task, especially when faced with the myriad of options available. Two of the most common asset classes are bonds and equities, both with their own unique characteristics ...Read more
Advice
Macquarie responds to ASIC's Federal Court proceedings
The bank has responded to civil penalty proceedings commenced by ASIC. Read more
Advice
Macquarie Bank taken to court by ASIC
The corporate regulator has taken action against the bank. Read more