From 2020 onwards, AFSA will be analysing aspects of the personal insolvency system and publishing our findings in best practice reports. The reports will initially focus on the strategic areas highlighted in the annual Insolvency compliance program.
When people are in financial distress, they can be targeted by unregulated and untrustworthy advisors who provide unethical advice that can result in individuals unwittingly committing criminal actions. The report highlights the prevalence of untrustworthy advisors, discusses the consequences of untrustworthy advice and also details common tactics which may be a sign of untrustworthy advisor activity.
The report also explains how debtors, creditors, insolvency practitioners and financial counsellors can work together with AFSA to tackle the issue of untrustworthy advice in the insolvency system.
Independence is important to fairness of the outcomes in the insolvency system. This report clarifies what practitioner independence means in practice and addresses the misconceptions surrounding it. Drawing on case law, regulatory and industry guidance, it helps practitioners gain a better understanding of our expectations in the area of independence.
The report also explains the principles of independence to debtors and creditors, to show how they can expect practitioners to operate and what they can do when they identify a potential issue.
Registered trustee remuneration in the personal insolvency system
To better understand why the market is not operating as effectively as expected, this report considers the process by which remuneration is set in the personal insolvency system and AFSA’s approach to monitoring its efficacy.
It summarises the key findings of AFSA’s various monitoring mechanisms, describes some examples of poor practice and identifies best practice principles around remuneration for practitioners.