Economics References Committee

Pauline Hanson

I move:

That the following matter be referred to the Economics References Committee for inquiry and report by the last sitting day in March 2025:

The reasons for the collapse of wealth management companies, and the implications for the establishment of the Compensation Scheme of Last Resort (CSLR) and challenges to its ongoing sustainability, with particular reference to Dixon Advisory & Superannuation Services Pty Limited (Dixon Advisory) as an example, and:

(a) the underlying cause of the collapse of wealth management companies such as Dixon Advisory, including the business model and influence of the sale of related party products, for example the US Master Residential Property Fund;

(b) how the actions of directors of wealth management companies and related entities, senior management and the individual advisers contribute to the collapse of these companies;

(c) the role of the financial services regulatory regime in the context of how matters involving the collapse of an investment product promoted by a vertically integrated business are assessed and how fault is attributed;

(d) evaluation of the placement of wealth management companies into administration and the related insolvency issues, including with respect to the appropriateness of actions by directors and senior management and the transfer of advisers and clients to a related party entity for no consideration;

(e) assessment of the period for which wealth management companies can remain a member of the Australian Financial Complaints Authority;

(f) the role of Australian Securities and Investments Commission (ASIC), including providing consumer information to investors affected by corporate collapse and consideration of the most appropriate arrangements for future cases of insolvency;

(g) ASIC's role investigating corporate collapse and the appropriateness of any regulatory intervention that may reduce scale of loss for consumers;

(h) options for enforcement action, including litigation, that ASIC has available to it in relation to wealth management companies following collapse;

(i) the implications of the collapse of wealth management companies on the establishment of the CSLR, including with respect to design considerations and the potential implications for future matters; and

(j) any other related matters.

Anthony Chisholm

by leave—I move an amendment to the motion:

Omit "Economics References Committee", substitute "Parliamentary Joint Committee on Corporations and Financial Services".

Jonathon Duniam

I seek leave to make a short statement.

Sue Lines

Leave is granted for one minute.

Jonathon Duniam

This motion highlights the government's poor implementation and maladministration of their Compensation Scheme of Last Resort. The government's failed on its promise to bring down costs for financial advisers. The ASIC and CSLR levies have skyrocketed. The government's reneged on covering the first 12 months of the scheme's costs, and little progress has been made in the 640 days since the government received the review's final report. The coalition supports a fairer and more sustainable compensation scheme of last resort. The proposed inquiry should focus on this and correcting errors in the government's design of the scheme and bringing the scheme's costs down.

Sue Lines

The question is that the amendment moved by Senator Chisholm to business of the Senate No. 2, standing in the name of Senator Hanson, be agreed to.