MEDIA RELEASE (AU)

Chartered Accountants Australia and New Zealand (CA ANZ) welcome the Australian Government's proposed consumer protection reforms, describing them as a significant response to weaknesses exposed across the superannuation, financial advice and investment sectors.

The reforms follow the collapse of the Shield and First Guardian Master Funds, which affected almost 12,000 Australians and involved around $1 billion in retirement savings. 

CA ANZ Group Executive Advocacy, Public and Government Affairs, Damian Ogden, said the reforms were a necessary response to recent failures in the financial services system. 

"The Shield and First Guardian collapses demonstrate the devastating consequences when failures occur at several points across the financial services system,” Mr Ogden said.  

"Consumers need effective protections before their retirement savings are transferred into unsuitable, high-risk or poorly governed investments." 

CA ANZ supports reforms aimed at strengthening protections for superannuation members, improving oversight of SMSFs, cracking down on harmful lead generation practices and lifting standards across investment products. 

"Stopping harmful conduct at its earliest point is preferable to trying to compensate consumers after their savings have been lost. Any new rules should be clear, enforceable and focused on the business models and practices that create genuine consumer harm," Mr Ogden said.  

CA ANZ welcomed ongoing financial advice reforms, including the proposed New Class of Adviser, but said the framework should be expanded to allow appropriately qualified accountants to provide non-product financial advice. 

"Accountants are often the first trusted professional Australians turn to when making important financial decisions," Mr Ogden said.  

"Expanding the new adviser framework to include accountants providing non-product financial advice would significantly improve access to affordable guidance while maintaining strong consumer protections." 

CA ANZ supports strengthening the Compensation Scheme of Last Resort (CSLR) but is concerned that most SMSFs will be required to contribute despite being ineligible to make a claim. 

The CSLR acts as a safety net for consumers who are unable to recover compensation awarded through AFCA after a financial services provider fails.  

"The funding arrangements must be transparent, sustainable and fair to both consumers and the sectors required to fund the scheme," Mr Ogden said.  

The package also includes reforms to the governance of managed investment schemes (MIS), including additional reporting requirements to ASIC. CA ANZ believes there is more to be done to regulate this important sector. 

Mr Ogden said consultation on the package would be critical to ensuring the reforms achieve their objectives without creating unnecessary complexity. 

"This is an extensive reform agenda. The consultation process will be essential to ensure the final legislation strengthens consumer protection, preserves access to quality advice and avoids unintended consequences," he said.  

"CA ANZ looks forward to being actively involved in the development of the legislation."