Advisely PartnerAMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!
Hi Phil
Thanks for the good work. What is the Coalition's view on CSLR? What is the logic pollies use to backdate the start date? Why did Dixon's PI insurer not pay the claim? Why were the directors not affected? Can other advisers do the wrong thing and keep expecting honest advisers to foot the bill?
- Phil.Anderson
Thanks OTF Curious Observer. The coalition are aware of our objections and are sympathetic to our concerns. I believe that they are supportive of our views on the retrospective application of the legislation and the Government being forced to meet it’s earlier commitment to pay for the first 12 months of the scheme. I expect that we will hear more from them on the CSLR over time.
The PI Insurer for the Dixon Advisory and broader E&P Financial Group has made a contribution towards the claims, which we understand is $12m. This is a tiny fraction of what the total cost will end out being. The problem with PI is that there is normally a cap and that it does not apply in a range of circumstances, including non approved products and after a business goes into administration. It will never provide the level of protection that we might want in the case of a black swan event like Dixon Advisory.
We would love to know the full reason why action was not taken against the Directors for what went on in the Dixon Advisory business. The answers that ASIC have provided so far in response to that question do not give us an explanation that we can accept.
The Dixon Advisory case sets an example of why there are important flaws in the design of the CSLR. It should not enable people to just walk away from an advice subsidiary and keep operating in another form. This is wrong. There needs to be consequences for this type of activity and the scheme needs to be fixed to ensure that this cannot be repeated.
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.
