Post by Australian Finance Industry Association

AFIA CEO Diane Tate’s new opinion piece on the Compensation Scheme of Last Resort is out today in The Australian Financial Review. In the article, Diane examines how the CSLR has drifted from its original purpose, with current design settings now placing both consumer protection and market integrity at risk. The scheme was intended to be limited and carefully targeted, consistent with the Ramsay Review’s core principle. Instead, costs are increasingly being shifted onto responsible firms, and ultimately consumers, rather than those responsible for misconduct. A sustainable approach requires a compensation framework that is adequately funded when needed and designed to discourage, rather than enable, poor conduct. That starts with excluding managed investment vehicles and limiting compensation to actual capital losses, not speculative profits. Read the full piece in today’s AFR on why consumer protection must not come at the expense of sustainability or standards. Link in the comments below. #AFR #ConsumerProtection