CSLR letter-writing campaigns ‘starting to bite’: AIOFP

Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston said the response from local MPs means the government is “getting worried and the strategy of writing to your local member is starting to bite”.

“It is a typical ‘pro forma’ response full of motherhood statements from the ministers office (more than likely by a former Treasury bureaucrat),” Johnston said.

He added: “The response does not address the stench around the Dixon manipulation or how the original intentions of [commissioner] Hayne’s CSLR recommendations have been bastardised (by the bastards) to suit the institutions and unfairly blame the advice community for product failure.”

The letter from a staffer on behalf of Meryl Swanson, federal member for Paterson, and shared by the AIOFP, largely comprises factual information about the Compensation Scheme of Last Resort (CSLR), laying out how it came into existence and its operation. This includes breaking down the sector caps and the minister’s powers around special levies.

However, it did note that the government would “continue to monitor the implementation and operation of the scheme to ensure it is meeting its policy intent”.

“The government is also prioritising expanding access to safe, affordable and quality financial advice to deliver better outcomes for the millions of Australians seeking financial advice and information,” the letter said, pointing to the second tranche of Delivering Better Financial Outcomes (DBFO) reforms.

It said the reforms would “further increase access and affordability of financial advice over the second half of this year”.

“These reforms include the government’s commitment to reform statements of advice, modernise the best-interests duty and remove the safe harbour steps, and increase the provision of simple advice by financial institutions,” the letter said.

Johnston urged members to “keep up the pressure” on local MPs, noting that the tactic would be particularly effective in marginal seats held by Labor.

“As we know, all the minister has done since the Education Pathways success is increased compliance costs and extort money out of the advice community to fund the Dixon victims … which includes Canberra bureaucrats,” he added.

Last week, the AIOFP said it had referred its concerns around the role “Treasury bureaucrats” have played in the construction of the CSLR to the National Anti-Corruption Commission (NACC) for investigation.

“Further to our correspondence with your office on June 30th we have some additional information that raises further questions and confusion about the relationship between the CSLR, the Dixon Advisory failure and the Treasury bureaucrats who we assume structured the legislation and its outcomes,” Johnston said in a letter to Financial Services Minister Stephen Jones.

“This issue has enraged and galvanised the advice community like no other in living memory, it will substantially increase the cost of advice for consumers when the government’s objective should be to lower costs.”