CA ANZ welcomes the opportunity to make a submission to the inquiry.

We are not able to provide a view about the underlying causes for the collapse of wealth management companies; the actions of directors, related entities or senior management; or the placement of these companies into administration and related insolvency issues except in passing.

Our comments instead focus on the impact on consumers from these collapses; how consumers can be protected; and, if necessary, compensated for their losses; and importantly the role and operation of the Compensation Scheme of Last Resort (CSLR).

It is essential that there is an appropriate external dispute resolution (EDR) framework for the financial services sector that ensures industry participants are accountable for the financial products and advice they provide. The framework should appropriately protect consumers and, where necessary, allow them to access adequate compensation and redress.

The scheme as introduced has significant shortcomings, which are now being highlighted by the collapse of Dixon Advisory. Further, the Dixon Advisory collapse has exposed flaws in the dispute resolution framework.

We strongly urge the government to indemnify financial advisers against claims for losses that were incurred before the formal commencement of the CSLR.