Choice calls for $500,000 compensation
Amid the continuing debate over the skewing of risk-based markets, consumer group Choice wants retail financial services clients to have access to last resort compensation of $500,000 to be funded by a post-event levy across the financial services industry.
Choice is calling on the Federal Government to develop a “whole of market” solution with respect to compensation “rather than just dealing with the issues now arising in the cash management or mortgage sectors”.
It said it believed consumers who had suffered losses because of wrongdoing by financial advisers and service providers should be entitled to compensation, even where the guilty party was unable to pay due to insolvency.
“The scheme would provide last resort compensation in full or in part to the retail client up to a limit of $500,000,” Choice director of policy and campaigns Gordon Renouf said.
He said confidence was the key in the current environment and that was why a bold initiative with both government and industry working together was needed.
“It’s as close to a guarantee as we can go without distorting risk-based markets,” Renouf said.
AUTHOR
Mike Taylor
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