The Australian Financial Security Authority (AFSA) has issued a national warning, including Queensland, to people who might be facing financial difficulties in the months ahead to take great care when engaging a financial advisor.
Chief Executive of AFSA, Tim Beresford, launched an Authority report, Untrustworthy Advisors: A Hidden Scourge in Australia’s Personal Insolvency System, which he said highlighted the prevalence of questionable advisors whose actions could see an innocent client facing prosecution and possibly imprisonment.
“Australians are facing the perfect storm for increased financial insecurity in the next 12 months, making them vulnerable to dodgy insolvency advice,” Mr Beresford said.
“On the back of a tough few years of fire, drought, flood and the pandemic, rising interest rates and cost-of-living pressures mean that more Australians may struggle to pay their bills and mortgages.”
Mr Beresford said the report explained that untrustworthy advice was hard to address because prosecution typically relied on the testimony of victims who might fear incriminating themselves.
He called on public and insolvency practitioners to help the AFSA disrupt the business of untrustworthy advisors and cut them out of the system.
“During the pandemic, Australians developed a different relationship with their creditors as banks and utilities offered payment holidays,” he said.
“We’re hoping that greater levels of trust will encourage people to talk to their banks or creditors early and negotiate a repayment plan.”
Mr Beresford said the earlier people engaged with creditors, the more likely they were to find a workable solution that kept them out of the insolvency system.
The AFSA’s 11-page report can be accessed at this PS News link and its online tip-off services at this link.
