The FAAA on Wednesday 14 August met with Minister Stephen Jones to raise key concerns regarding the Compensation Scheme of Last Resort.

During the meeting, FAAA’s CEO Sarah Abood and chair David Sharpe raised a number of issues including the total cost of the scheme, and whether it is operating as a true last resort.

“We have told the minister that although we support the scheme, the funding model is completely unsustainable. The financial advice profession does not have the capacity to pay compensation to the clients of large listed entities which have done the wrong thing, and nor should we. We are looking at losses approaching $135 million for Dixon Advisory alone, with nothing in place to stop similar situations happening in the future,” Ms Abood said.

“We believe the Minister has clearly heard these concerns and is genuine in his intent to work with us to ensure that the CSLR achieves the goal that we all support.

“He has advised us that the FAAA will have the opportunity to work with Treasury to outline unintended consequences of the CSLR and listen to pragmatic and feasible solutions.

“We have also called on the government to pursue a public inquiry into what really happened at Dixon Advisory. With potential losses approaching $400 million, there is a clear public interest in understanding what has happened and how similar situations can be prevented in future.”

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