‘We haven’t chosen to go fast’: Berry provides CSLR update
The Compensation Scheme of Last Resort (CSLR) chief executive David Berry has confirmed the number of complaints the organisation is actively working on.
Speaking on a webinar hosted by the Financial Advice Association Australia (FAAA), Berry stated that the CSLR is actively managing 102 claims at the moment.
Breaking this figure down, 79 per cent are in relation to financial advice, 15 per cent are to do with securities dealings, 5 per cent for credit intermediaries (finance and mortgage brokers) and 1 per cent for credit providers.
There have been 2,773 complaints made by consumers against Dixon Advisory, which make up the bulk of financial advice complaints.
Also speaking on the webinar, Shail Singh, Australian Financial Complaints Authority (AFCA) lead ombudsman for investments and advice, confirmed that the body has received approximately 3,000 advice claims across 31 different financial firms – some 300 claims in addition to the 2,773 complaints relating to Dixon Advisory.
The CSLR scheme was first launched four months ago in April and began paying the first claims before the end of the 2023–24 financial year. It has paid a total of 37 claims since its introduction, Berry stated, representing $3.3 million so far. Another 20 claims have been closed due to ineligibility.
“We haven’t chosen to go fast because we want to make sure we do this right, so the focus has been on quality and working through the eligibility assessments. We’ve also been focusing on how we build the monitoring mechanisms to match the assumptions that went into the original levy estimate,” the CEO described.
“It has certainly been a very busy four months.”
The sum is up from four claims paid as of 11 June 2024 which totalled over $360,000, three of which related to financial advice.
Berry also provided further details as to how its staffing operates through the following four teams:
- Compensation payments
- Levy forecasts and administration
- General counsel
- Communications to increase trust in the financial system
The size of its operational team is dependent on the number of claims and speed through which AFCA works through them, he continued, with the scheme planning to hire additional staff when more claims arise.
“We’ve been in operation now for four months and the number of claims we’ve paid is still quite small when you weigh it up against the claims which are still yet to come. We are certainly pushing the boundaries with the administrators and liquidators; we’re working with Australian Restructuring Insolvency and Turnaround Association (ARITA) and their members to help them understand what we’re asking and to make sure we have a clear path.”
The CSLR chief executive reminded consumers and professionals of its three core tasks, which are to:
- Compensate victims of financial misconduct.
- Forecast compensation payments in the coming year.
- Rebuild trust in Australia’s financial system.
AUTHOR
Jasmine Siljic
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
its a test!
This is a body that serves no purpose. The liberals served the industry an unhealthy sandwich when they created yet another bureaucracy. It's about time that the CSLR provided in depth reporting on each case where they make a pay-out.
And it remains a mystery why the FAAA would support this new tax on their members.