Nationwide advocacy is underway for legislative reform to protect client funds held by auctioneers through the use of audited trust accounts, bringing the entire sector into line with industry best practice. A strong example of member-driven advocacy, the reform is being championed by certified auctioneers through the Auctioneers and Valuers Association of Australia (AVAA), the sector’s peak body.
Auctioneers facilitate the efficient and transparent sale of a remarkably diverse range of assets, including fine art and antiques, collectables, motor vehicles, jewellery, plant and equipment, marine and aviation assets, rare books, coins and stamps. Their services are relied upon by private vendors, businesses, insolvency practitioners, financial institutions and professional advisers.
As part of an auction transaction, an auction house will commonly receive sale proceeds from a buyer before remitting the money to the vendor. It may also hold deposits and other payments belonging to clients. These amounts can be substantial.
AVAA is calling on state and territory governments to introduce legislative reforms so that money received on behalf of clients by auctioneers is held in designated trust accounts, separate from the auction business’s operating funds.
Under the framework proposed by AVAA members, client money would be deposited promptly and withdrawn from a trust account only for authorised purposes, such as payment to the vendor or the deduction of agreed commissions and expenses. Auction businesses would maintain clear transaction records, regularly reconcile trust accounts against client ledgers and arrange annual independent audits. Serious breaches or deficiencies would also be subject to mandatory reporting.
These measures would provide an important safeguard if an auction business became insolvent, misused client funds or failed to maintain adequate financial controls.
A nationwide framework would bring the broader sector into line with AVAA Professional Standard 4 – Auction Client Funds Handling, which is a compliance obligation for professionals holding the respected AVAA Certified Auctioneer (CAAu) credential and for AVAA Corporate Members.
The AVAA Professional Standard 4 establishes clear requirements for the segregation of client funds, recordkeeping, reconciliation, oversight and accountability. It demonstrates that stronger safeguards can be proportionate, workable and readily incorporated into normal commercial practice.
AVAA has confidence in the integrity and professionalism of Australia’s auction sector. Most auctioneers understand the significant responsibility involved in receiving and managing money on behalf of others. However, the conduct of a small number of poorly managed or unscrupulous operators can expose clients to substantial losses and undermine confidence in the wider profession – that’s why trust accounts are necessary.
AVAA has made strong representations to the relevant ministers in each state and territory where equivalent consumer protections are yet to be established. In Queensland and Tasmania, where licensing arrangements already apply, AVAA is supporting the continued effective operation and enforcement of those safeguards.
AVAA is also encouraging state and territory governments to consider trust account requirements as part of broader reforms to the registration or licensing of auctioneers and auction houses. These reforms could include good-character and fit-and-proper-person tests, professional indemnity insurance, continuing professional development, financial and recordkeeping obligations, and recognition of credible professional certification.
With the strong backing of its members, AVAA will continue engaging with state and territory governments to advocate for a consistent national approach that protects clients, supports reputable auction businesses and strengthens confidence in the profession.
.
Interested In Finding Out More?
If you’d like more information about the member-driven advocacy on this issue, send an email to goverment.affairs@avaa.com.au or telephone 1300 928 165. You can also stay up to date by following AVAA on LinkedIn, X/Twitter and Facebook.
.
