Advisely PartnerAMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!
Hi Phil,
What is the purpose of CSLR really?
Builders simply close a company leaving the most important investment of families (their home) either poorly done or unfinished with no further ramifications - all they do is wind up one company after another.
I don't see this in any other profession. Don't doctors make mistakes or do 'wrong' leading to major financial consequenses?
What about lawyers or any other profession?
Financial planners seem to be taken to be wrong at face value unless they can prove otherwise and in hindsight. It can be that people cannot realise that they have been wronged for a many many years and one fine day start pointing fingers and want compensation.
- Phil.Anderson
Thanks ShwetaM1. The CSLR is designed to ensure that clients who have been awarded a determination by AFCA, are actually paid, even when the firm becomes insolvent or refuses to pay. This is an objective that we can support, provided it is applied in a reasonable manner.
We are not aware of a similar scheme, however neither are other professions subject to an ombudsman arrangement with the powers that AFCA has. There are other forms of protection for clients in other fields including stockbroking, however what we have is quite unusual and very protective of clients. Some would argue that this is understandable given the critically important role that advisers play in the management of their client’s financial affairs.
We are certainly concerned that financial advice often takes the blame for what is basically a product issue, and we would argue that was at the core of what went wrong with Dixon Advisory. We also argue that the exclusion of MISs from the CSLR scheme, places an unfair priority on seeking fault in the advice that was provided. We can only continue to argue against the way this works and seek more comprehensive action by the regulators against product providers when things go wrong.
The FAAA is holding a webinar on Tuesday 6 August to hear from AFCA and the CSLR about how the CSLR will work. Please attend this if you would like to know more about the CSLR.
