The SMSF Professionals’ Association of Australia (SPAA) broadly supports the Federal Government’s response to the parliamentary inquiry into the collapse of Trio Capital and the report into compensation arrangements for consumers of financial products.
But SPAA Director, Education and Professional Standards, Graeme Colley, says: “The proof of this pudding will be in the eating.
“What SPAA is waiting to see is how these recommendations from the Parliamentary Joint Committee on Corporations and Financial Services into Trio and Richard St John’s report into compensation arrangements for consumer are implemented.”
He adds that it’s SPAA’s opinion that there are some aspects of the two reports’ recommendations that should go further than their original proposals, such as a last resort compensation scheme.
On Friday, the Minister for Financial Services and Superannuation, Bill Shorten, responded to the two reports by saying the Government accepted “the vast majority of their recommendations”.
The Government’s response will be coordinated by the Superannuation Regulators Working Group, comprising Treasury, the Australian Taxation Office, APRA and ASIC.
Colley says SPAA is disappointed by the Government’s decision on the last resort compensation scheme for the financial services sector by accepting St John’s advice that such a scheme would be “inappropriate and possibly counter-productive”.
“SPAA will continue to advocate for such a scheme where clients have suffered financial losses because of the misconduct or insolvency of an AFS licensee, and that the compensation should be funded by a levy imposed on that sector of the industry where the misconduct occurred.”
