Positive shift in minister’s attitude sparks hope for advice profession

The CEO of the Financial Advice Association Australia (FAAA) noted a positive change in the minister’s attitude during their latest meeting on the Compensation Scheme of Last Resort (CSLR), indicating a greater willingness to understand the industry’s concerns.

“In the last minute we had with him [Minister for Financial Services], there was absolutely a recognition that there is a problem that needs to be solved and that was a shift from previous discussions where it had been very much, ‘Well this is the legislation playing out as legislated’,” Sarah Abood said.

“So that was a big turnaround … That was very positive.”

In addition to meeting with Stephen Jones, the FAAA has also engaged with Treasury and is scheduled for another discussion soon.

“It’s definitely looking like genuine engagement, genuine willingness to hear from us on what we think the problems are and potential solutions,” Abood said.

Last week, it was revealed that the economics references committee will scrutinise the collapse of Dixon Advisory and its impact on the CSLR after a motion moved in the Senate by Senator Pauline Hanson secured cross-Parliament support.

And on Friday, the Senate announced the finalised terms of reference for the inquiry, which is scheduled to report by the last sitting day of March 2025.

Considering these developments and the minister’s apparent increased interest in finding a solution, Abood and her colleague Phil Anderson are optimistic about the prospect of a positive outcome.

“There will be a lot more work to put our case forward, highlighting the issues with what Dixon Advisory did and the design and implementation of the CSLR, however, today is a great start,” Anderson, who is the body’s general manager of policy, advocacy and standards, shared on his LinkedIn when the inquiry was first announced.

Last week, Luke Howarth, shadow assistant treasurer and shadow minister for financial services, told ifa that the need for this inquiry “highlights the Albanese government’s poor implementation and maladministration of their Compensation Scheme of Last Resort”.

“The Coalition supports a fairer and more sustainable Compensation Scheme of Last Resort,” Howarth said.

“The proposed inquiry should focus on how to achieve this aim, how the errors in the government’s design of the scheme can be corrected, and how the scheme’s costs, which are ultimately passed on to consumers, can be brought down.

“Financial planners and advisers are hurting at a time when they should be focused on rebuilding their industry and helping Australians who are currently under-advised and under-insured.”