Minister for Financial Services, Stephen Jones, has confirmed the start date and chair for the Compensation Scheme of Last Resort (CSLR).
The scheme will start on Tuesday, 2 April, to give victims of financial services misconduct access to redress, and compensation and payments will follow for eligible consumers.
Up to $150,000 can be provided to eligible consumers who have an unpaid determination from the Australian Financial Complaints Authority (AFCA) for complaints regarding personal financial advice, credit intermediation, securities dealing and credit provision.
As an interim step, amendments have been made to AFCA’s authorisation so that, to the extent possible, complaints that may be eligible under the CSLR are progressed only if the financial services firm is licensed to provide the relevant product or service.
Meanwhile, Jo-Anne Bloch has been appointed as its inaugural independent chair for an initial three-year term.
She was the chief executive of the Financial Planning Association of Australia (FPA) from 2006–2010 and a non-executive director at the Association of Superannuation Funds of Australia (ASFA) from 2018–2021.
Outside of associations, she spent over a decade with Mercer, including four years as a financial advice leader and, most recently, as senior partner and head of superannuation services.
Jones said: “Bloch is an experienced leader in financial services, and in particular financial advice, with extensive experience in engaging government and in the not for profit sector, and is well equipped to guide the scheme at its inception and beyond.”
Other members of the board include former UniSuper chief executive, Kevin O’Sullivan, and Delia Rickard, former deputy chair of the Australian Competition and Consumer Commission (ACCC).
The estimated sum for the initial levy will be $241 million and includes provision for the majority of claims involving Dixon Advisory and Superannuation Services (DASS).
Another great big new tax honest financial planners need to pay whilst product providers, who primarily are the cause of the issues, don’t have to.