Proposed financial abuse hub to help advisers identify and manage cases

Advisers are uniquely positioned to identify and alleviate financial abuse cases, but they need support and an action framework according to the association.

The Financial Advice Association of Australia has proposed a “central source of training” be set up for financial advisers and the victims of financial abuse cases, among other measures aimed at providing support for those affected.

In a submission to the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into Financial Abuse, the FAAA lobbied for a training, information and support centre that would help train advisers in how to identify and properly manage cases of financial abuse among their clients.

The proposal for a support hub sits alongside several other FAAA recommendations aimed at limiting the damage of financial abuse, including establishing a hotline for consumers, raising public awareness, reviewing whistleblower laws, “harmonising” state-based estate planning laws across the country and establishing both a register of Power of Attorneys and a standard identification, reporting and escalation framework.

According to the Australian Bureau of Statistics, 1.6 million women and 645,000 men have experienced financial abuse in their lifetime. 16.3 per cent of Australian women have experienced economic abuse in intimate relationships, the ABS confirmed.

The FAAA says that by implementing its proposals, including the establishment of a financial abuse hub centre, financial advisers will be empowered with the tools and support they require to protect their clients.

As trusted confidantes to their clients, with visibility of their financial affairs, financial advisers are uniquely positioned to identify the early signs of financial abuse, the FAAA adds, especially amongst women and the elderly. Yet there is little in the way of support or an established framework to guide these advisers, which may inhibit them from getting involved and providing assistance.

“Financial advisers are uniquely positioned to detect signs of financial abuse due to their close relationships with clients and their families,” FAAA chief executive Sarah Abood said. “Despite this, research conducted by the FAAA alongside members shows that there is no clear method of reporting or assisting clients who are subject to financial abuse.”

Financial abuse can show its face in a number of forms, Abood continued, including unauthorised transactions, coerced changes of wills or powers of attorney, or financial exploitation.

“Financial abuse is often challenging to identify, making it a difficult issue to address. Some victims may not even realise they are being abused, especially if the abuse is subtle or if it occurs within families,” Abood said, adding that the role financial adviser play cannot be overstated.

“Through clear guidance, training, and support, financial advisers can help protect clients and other family members from financial abuse and support them in regaining financial independence.”