‘It is time the government listened to the profession’: AFA slams scheme proposal

In its submission about the scheme – which aims to meet the cost of unpaid AFCA determinations that arise as a result of a licensee being unable to pay or refusing to pay – the industry body cited the bill’s inclusion that financial advice sector would be forced to pay over three-quarters of costs within the first year of the scheme as a major issue.

“Costs which will inevitably have to be borne in large part by the consumers of financial advice who more than ever need high-quality reasonably priced advice, which has the potential to significantly reduce the government’s financial liabilities,” the submission, signed by chief executive Helen Morgan-Banda, read.

“This initiative is perceived by the advice profession as another example of oppressive regulation that comes on top of existing regulatory cost pressures, including the recent announcement of a substantial increase in the ASIC funding levy and the expectation of a further increase due to the single disciplinary body.

“It is time the government listened to the profession and the hard-working Australians they serve.

“Imposing yet another regulatory cost burden demonstrates a lack of awareness and understanding on the part of the government.”

The submission concludes that while the AFA supports the establishment of the CSLR, the cost and annual administration need to be “heavily reduced”.

“It is our view that a lot more work needs to be done to address all the issues, before this scheme is ready to be progressed,” it read.

“We would also request that additional analysis is provided on the level of unpaid determinations and the main reasons why they remain unpaid.”

It comes after the AFA, alongside seven other industry bodies, spoke out against the draft legislation earlier this month.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.