It is critical to minimise the need for consumers’ to access compensation.

Effective regulation throughout the financial services system that appropriately covers the role of all sectors involved in the financial services value chain, is the critical first step in protecting consumers from detriment and financial loss.

Our current advocacy has three main objectives:

• Prevention – sensibly improve consumer protections throughout the financial services value chain.
• Support – ensure the consumer compensation framework includes all participants in the financial services value chain in a fair and equitable way to deliver adequate compensation to consumers.
• Funding – modify the CSLR funding model to ensure that more is done to seek recovery from those responsible for misconduct and to more fairly share the cost of any remaining compensation.

Read the FAAA’s policy and advocacy positions in our submissions, media releases and social media posts on the consumer compensation framework and CSLR.

In response to the Shield and First Guardian matters, the FAAA have proposed the following reforms:

• Banning cold calling for the purpose of leads generation for financial advice (or broader financial services) either through law change or a specific change to a Code.
• Alterations to the registration process for MISs to require a higher hurdle to be achieved for higher risk products.
• Introduction of ASIC reporting by MISs addressing key risk issues, such as asset allocation changes or material change in fund size.
• Tighter rules for super funds on the selection of investment options and ongoing monitoring.
• Modification to the law to allow losses incurred by clients related to multiple parties to be apportioned to those parties even when there is a breach of the Best Interests Duty or appropriate advice obligation.
• Changes to the AFCA Rules to allow super funds to be joined to a complaint against an advice licensee and to allow consumer complaints against the management of the fund or scheme as a whole.
• Clearer guidelines on adviser audit practices and early warning systems.