FAAA

The ATO has dug its heels in, and is firm in its belief that upfront advice should remain classed as capital expenditure. But the FAAA did gain a significant concession around tax (financial) advice provision.

In the Dixon’s inquiry vertical integration will not only be writ large, but it will have thousands of victims’ names attached to it. The practice has run relatively unfettered for years, but that may be about to change.

It’s essential that we learn from the Dixons Advisory scandal, the FAAA chief said, so we can avoid future harm. The association has asked the government to consider a full inquiry into the case, while advisers contemplate the financial toll ahead of them.

While the minister has remained relatively mute on the obvious issues with the CSLR, he will at least allow the association to discuss the scheme’s flaws with Treasury at some point.

There are several aspects to the treatment of the case that don’t add up, the association’s policy lead says, and a transparent public inquiry is more than warranted.

It’s a welcome stopper on the amount advisers will have to fork out, but has no connection to the core issue. The government still fails to recognise the inherent flaws in its CSLR scheme, and the industry is running out of patience.

Even though most of the Dixons Advisory complaints are yet to be submitted, the CSLR has already allocated a $24 million bill to the industry. Good financial advisers will be forced to pay for the nefarious and neglectful acts of bad ones for years to come.

There are several bones of contention that the FAAA, and the industry more broadly, has with the compensation scheme’s settings, despite supporting it in principle. At the heart of it is the government’s repeated willingness to foist retrospective punishment on the good for the sins of the bad.

The life insurance advice sector has been battling a host of issues, including an ill-fitting education program, remuneration uncertainty and product design flaws, for some time. Is it in a death spiral, or is there a path to sustainability for this crucial arm of the advice industry?

The government’s position on what to do with the Safe Harbour Steps is no longer clear, but the chances of seeing it supplanted by the existing Code of Ethics are slim according to the FAAA’s policy chief Phil Anderson.