Financial Advisers Hamstrung in Reporting Financial Abuse: FAAA Addresses the Issue

Financial advisers are facing challenges in reporting financial abuse, according to the Financial Advice Association of Australia (FAAA). The FAAA has highlighted the need for standardized protocols and tools to enable financial advisers to detect and address financial abuse effectively.

In a submission to a Parliamentary Committee, the FAAA emphasized the unique position of financial advisers in identifying signs of financial abuse due to their close relationships with clients. However, the absence of consistent protocols and legal obligations in relation to financial services companies dealing with suspected financial abuse is hindering their ability to take action.

The FAAA pointed out that financial abuse falls into a regulatory gap, with issues related to privacy, gaps in whistleblower laws, and conflicts of interest in the estate planning framework leaving Australians vulnerable to financial abuse. The lack of consistent protocols for handling suspected financial abuse and barriers to effective collaboration due to privacy laws and insufficient whistleblower protections are further complicating the situation.

To address these challenges, the FAAA recommended raising awareness through public campaigns, developing educational resources, establishing support services for consumers and professionals, and implementing legal reforms to create consistent national laws on estate planning and powers of attorney. Standardizing reporting systems and protocols across the financial services industry was also highlighted as crucial in identifying and addressing financial abuse.

By implementing these recommendations, the FAAA believes that a safer financial environment can be created, empowering financial advisers to protect their clients from abuse and contributing to a more just and equitable society.