HARSH POLITICAL REALITIES

Like most critical structural issues directly impacting the Adviser Profession and consumers over the past 20 years, the CSLR is shrouded with a political smoke screen and infused spin to suit the Financial Institutional lobby’s objectives.

It is time for the Adviser focussed Associations to face the harsh reality that we have very little power in Canberra. Industry magazine articles/opinions do not resonate in Canberra, Superannuation Funds and Financial Institutions financial resources and donations do.

We obviously cannot compete with their resources, but we can weaponise our collective client base to intimidate all Politicians.

The only positive piece of Legislation over the past 20 years has been the Experienced Provider Pathway [EPP] piece that saved the careers of around 5,500 mature Advisers, that was only achieved due to luck and unique circumstances. This is an AIOFP initiative.

The latest CSLR spin has been the Government pushing for the amendment of the Special Levy Disallowance Period from 15 days to 5 and ASIC’s role with collecting the levy from the Industry. The MIS levy inclusion issue has been cleverly suppressed and shelved.

We support Consumers getting a quicker settlement in justifiable circumstances but there lays the problem, the narrative has now moved away from which stakeholders should be contributing to the Levy to when it should be paid.

The Minister has indicated the inclusion of the MIS sector Levy calculations will now be reassessed in February 2027 which is very likely to be ‘kicked down the legislative road’ for another 12 months in political discourse. The hampering problem is the FSC lobbied to have the MIS exclusion placed in the Legislation making it very difficult to navigate out.

The Financial Institutional members of the FSC must be very happy.

Meanwhile another $198,000,000 million must be settled this side of Xmas….simple arithmetic puts the next levy at  $13,200 per Adviser, not a nice Xmas present to say the least and unfortunately it won’t end there. More Dixon, Shield and First Guardian claims are in the pipeline for 2027 and beyond.

We are now at that fork in the road where legal action in the Federal Court based on the unfairness of the CSLR Legislation is our only course of action in the short term to protect ourselves. Our legal advice suggest we have a good chance of success, but we need the Adviser Profession to help fund the challenge.

Unfortunately the High Court challenge over the Grandfathered Revenue ban in 2017 never eventuated due to lack of support from the Profession, we had groups who faced massive losses in the hundreds of thousands but refused to pay $300 to try and get it back…..

It is fair to say many Advisers want others to do the heavy lifting and are apathetic to direct pushing back action. This tendency to ‘roll over’ is well known in Canberra, its about time our Profession changed its approach otherwise this 20-year nightmare will continue until no one is left.

The ‘Elephant in the room’ are ASIC, they were warned 2 years before the Shield/First Guardian failure but failed to act. After a promising start with implicating Netwealth and Macquarie as Trustees to the fiasco, ASIC are now trying to shift the blame onto Interprac [5 Advisers out of 300 involved] and the CEO who relied on the Interprac compliance team whilst he managed 6 other business’ within Sequioa.

How can ASIC ban a non adviser for 10 years when not one Institutional Executive or in house Adviser has ever been banned despite 191 failed/impaired funds representing $43.7 billion since 2006? [see attached] ASIC allowed all 191 funds onto the market but avoids any accountability.

Why was no Adviser ever banned despite DIXON Advisory being fined $7m for not acting in the best interests of clients? Why was one of these senior Dixon Advisers parachuted into a Department of Treasury role as head of Financial Advice?

Why was the Dixon failure given preferential retrospective treatment under CSLR when the other 190 fund failure victims missed out? Was it because the Dixon business was based in Canberra with numerous senior bureaucrats as clients who lost savings in the failure?

You cannot make this stuff up…..why am I reminding you of these events? We need to get angry and determined to corral the most important political asset you have [your clients] and start pushing back with CSLR action in the Federal Court.

The question is how much of the expected $13,200 CSLR invoice are you prepared to gamble on a victory in the Federal Court?

Please start thinking about how you can assist the cause and send this email onto any non-members for consideration.

More information shortly.