The CEO of the AIOFP, Peter Johnston, reports on the Compensation Scheme of Last Resort (CSLR).

Dear Parliamentarian,

The credibility of the two major Political parties will be on the line if the Compensation Scheme of Last Resort’s [CSLR] original Royal Commission recommended guidelines are diminished to suit the agenda of political donors.

It will be a slur on our Nations democratic process.

The CSLR Recommendation was designed by Comm Hayne to compensate Consumers for capital losses caused by predominately poor management of Managed Investment Schemes [MIS] by Institutions.

On page 36 and Foreword of the attached ‘FSRC – GOVERNMENT RESPONSE TO HAYNE ROYAL COMMISSION’ document, it is quite clear former Treasurer Frydenberg supported the back dating of the catchment to 1/1/2008 and all products that are assessed by Australian Financial Complaints Authority [AFCA] are included.

This includes MIS’s, which represents over 95% of all products in the marketplace and registered/released to market by ASIC under a Product Disclosure Statement. If MIS are excluded it will reduce CSLR to a ‘pointless pile of legislative paper’, covering very little and largely irrelevant.

Importantly, this Comm Hayne Recommendation received emphatic bipartisan political support from the Opposition to implement CSLR in its original format at the time.

We suspect the Institutional lobby are now trying to influence the parameters of CSLR to suit their own self – interested agenda. In the past the Institutions have successfully and unfairly deflected the poor performance of their MIS products onto Advisers to avoid accountability, CSLR will now finally put them firmly in the frame for their performance.

CSLR is emphatically about a positive consumer outcome. Any Politician trying to diminish this position by excluding MIS’s and not back dating the catchment period to 1/1/2008 are not honoring the first tenet of entering Parliament, acting in the best interests of the tax-payer/consumer.

Hopefully, democracy will counter the tens of millions of donations the institutions have donated to the major political parties and deliver a great and just outcome for consumers.

We trust you can support this position.


Peter Johnston | Executive Director
Association of Independently Owned Financial Professionals
Suite 1211, 1 Queens Road, Melbourne VIC 3004
P 1800 111 203, d 03 9863 7574, m 0418 857 621 | Download my business card

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