Ramsay Review CSLR authors deliver crickets | Australian Markets

An appeal to 3 of the Ramsay Review panellists to help the inappropriateness of the Compensation Scheme of Last Resort (CSLR) funding model seems to have fallen upon deaf ears with every of them declining to get entangled.

The Association of Independently Owned Financial Professionals (AIOFP) has revealed it had written to the three panellists, present Australian Securities and Investments Commission (ASIC) commissioner, Alan Kirkland, Professor Ian Ramsay and present Productivity Commissioner, Julie Abramson.

The AIOFP additionally wrote to former Royal Commission chair, Kenneth Hayne.

“We had been searching for their cooperation to publicly state that the CSLR construction they initially really useful is just not mirrored within the present CSLR laws, AIOFP government director, Peter Johnston instructed members

“We have been disappointed with the response from three, whereas Mr Kirkland is the only one not to respond,” Johnston mentioned.

“The responses varied from ‘not wanting to be involved’, ‘no longer interested’ and too conflicted to comment’.”

“Considering the many millions spent by Consumers/tax payers on these matters and the influence these individuals have wielded, they should be compelled to comment post release when its in the best interests of Consumers in our view,” Johnston mentioned. “We contend that if any of these highly esteemed and respected individuals cooperated, it will shine a different light on the CSLR issue.”

Johnston’s message to members mentioned that the “crucial issue is the current CSLR legislation does not reflect the intent of the 2017 Ramsay Review and Commissioner Hayne’s RC 2019 intentions which had considerable market support”.

“We consider the CSLR consequence was closely and efficiently lobbied by the Financial Services Counsel [FSC] to favour of Institutions/Product Manufacturers [manufacturers] on the expense of others.

“Taking benefit of technical ignorance with Politicians and Bureaucratic bias in Canberra on the time, Manufacturers had been excluded from being held to account for the management/efficiency of their own Financial Products and this accountability was inexplicably and unfathomably handed onto the Advice Profession and their Consumer purchasers.

“It was truly an astonishing achievement by the FSC  for their institutional Members to negotiate this position but unfortunately a diabolical outcome for Consumers and the Advice Profession,” Johnston mentioned.

“We will now be writing to the Chair of the FSC searching for their cooperation with informing Minister Mulino that their lobbying success with the CSLR Legislation must be rescinded due to the seriousness of the unintended penalties.

“Considering CSLR and the Life Insurance Framework Legislation [LIF] are arguably the two most draconian legislative outcomes in Financial Services history, and the FSC successfully lobbied both outcomes, we will be requesting they also include the modification of LIF in their report to the Minister,” Johnston’s message mentioned.

His message additionally accused the Australian Securities and Investments Commission (ASIC) of failing to take accountability for coping with flawed merchandise and deflecting blame to financial advisers.

“ASIC takes no accountability for permitting flawed merchandise onto the market and no accountability for the continued monitoring of these merchandise, so what does ASIC truly do to guard Consumers from Products failing? Judging from its quite a few press releases it spends the overwhelming majority of its time being reactive to comparatively minor market offences by attacking low hanging ‘Adviser fruit’ and never being proactive by holding different stakeholders to account for his or her conduct together with themselves.

“The CSLR manipulation has severely clouded the longer term viability of the Advice Profession, Financial Advisers have no alternative however to go the ASIC and CSLR levies back to purchasers which is clearly not sustainable. Furthermore, this can be very troublesome to draw new entrants into the Advice Profession with the grossly unfair CSLR liabilities casting a large black cloud over the industry.

“The CSLR solution is quite straight forward, Manufacturers pay for product failure, Financial Advisers for poor advice outcomes and Risk Advisers for poor risk advice failure. Banning Financial Advisers from creating a vertically integrated business model will eliminate future ambiguity around the responsibility if a product fails,” Johnston’s message mentioned.