SIAA welcomes certain elements of today’s regulatory and policy measures announced by Minister Mulino today aimed at strengthening protections across the superannuation, advice and investment ecosystem, improving access to advice and placing the CSLR on a firmer and fairer footing.
SIAA is particularly pleased that the government will get rid of the controversial ‘but for’ provision from the Compensation Scheme of Last Resort that compensates victims of financial misconduct for hypothetical losses. But it warns that unless the measure is implemented immediately it will not reduce the unsustainable and unreasonable costs the CSLR is imposing on industry.
“Compensating counterfactual outcomes extends beyond the role of a last-resort safety net,” said the CEO for Stockbrokers and Investment Advisers Association (SIAA), Maria Lykouras. “We have long argued that the CSLR was never intended to underwrite investment risk or pay complainants hypothetical ‘but for’ gains. But the changes limiting compensation to actual losses will not come into effect until 1 July 2027 which means industry will continue to be subject to these ballooning costs for some time.’’
SIAA is pleased that today’s announcement called out the importance of consumer choice in superannuation and did not include restrictons on super-switching, although the government will be legislating an obligation on super trustees to require advice fee caps. “We will carefully monitor how the legislation deals with advice fee caps. The Corporations Act already provides a mechanism that enables clients to provide consent to deduct advice fees from superannuation accounts. Financial advisers are already subject to strong obligations to consumers, including the best interests duty,” Mrs Lykouras stated.
The government also intends to make changes to anti-hawking provisions that will limit the existing financial advice exemption to existing client relationships. “SIAA is concerned about any changes to the anti-hawking provisions that could impact the ability of our member firms to provide their prospective clients with factual information. We will be reviewing these proposed changes carefully with our members and providing feedback to government on how these changes will impact access to advice in practice”, Mrs Lykouras added.
“We have concerns about the government’s application of the waterfall model outlined in the recent consultation to calculate the special levy for FY27 and we note that the Minister will consider the viability of the financial advice sector to ensure a fair and proportionate outcome”, Mrs Lykouras stated. “We look forward to receiving more details about how the special levy will be determined”, she said.
“We are pleased to see that the government intends to proceed with the Delivering Better Financial Outcomes reform package and stand ready to engage with the government on the implementation of the new statement of advice provisions as well as targeted reforms to the Best Interests Duty and the Code of Ethics to enable scaled advice,” Mrs Lykouras concluded. “We look forward to receiving greater detail on these reforms”.
ENDS
Contacts:
Maria Lykouras, CEO
0467 773 218