The financial advice industry should not have to pay toward funding the upcoming compensation scheme of last resort (CSLR), Synchron believes.
Synchron director, Don Trapnell, said 1.4% of complaints to the Australian Financial Complaints Authority (AFCA) were related to advice, and 0.03% were not settled, but the advice sector was expected to fund the lion’s share of the CSLR.
“On these numbers, it's clear that financial institutions that operate managed investment schemes should pick up the tab," Trapnell said.
"The advice community should not be required to pay any CSLR levy whatsoever."
Trapnell noted the CSLR proposal paper required the advice sector to pay 76% of the estimated levies for the scheme.
"On the flip side, the managed investment scheme providers, which have wreaked absolute havoc on consumers, will not be required to pay anything at all. It's absolutely disgraceful,” he said.
"The Government must stop making scapegoats out of the advice community, which is clearly not responsible for product failures and not responsible for the vast majority of AFCA complaints.
"A CSLR levy should instead be imposed on all new products and investment schemes."