On 1 November 2018, the Australian Financial Complaints Authority (AFCA) opened for business. Find out what sort of complaints they can investigate and how you can go about getting help if you have an issue with a financial provider.
What is AFCA?
Before the launch of the Australian Financial Complaints Authority (AFCA) this month, complaints about financial services and products were handled by one of three authorities – the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).
With all complaints now being fielded by a single authority, AFCA is aiming to provide a faster, more effective and comprehensive complaints resolution service. “AFCA will provide Australians with services that are easy to use, free and efficient,” says AFCA Chief Executive and Chief Ombudsman, David Locke. “We will use a range of skills including conciliation and negotiation to find fair solutions for all the parties.[1]”
Who is it for?
Both individuals and small businesses will be served by AFCA. Whether they have an issue with banking services, credit and lending, insurance, superannuation or investments, the AFCA is there to investigate their complaint and work towards a fair outcome.
If you had previously lodged your complaint with The SCT will continue to handle existing complaints lodged with them before 1 November.
Can the AFCA help financial advice clients?
A large majority of financial planners deliver excellent services and outcomes to their clients. In a 2016 study carried out by researchers from the University of Adelaide, University of Technology, Sydney and University of Western Australia, they found 80% of financial advice clients are satisfied with their adviser and would recommend them. 84% report high levels of trust in their adviser[2].
However, there are some cases when financial advice clients take issue with the advice they have received. They might feel that it didn’t properly address their needs or led them to make financial decisions that were not in their interests. In the first instance, it’s important to raise any concerns or issues with your financial advice professional. You can do this following their Internal Dispute Resolution (IDR) process. Your adviser’s Financial Services Guide (FSG) should provide information about their IDR so you can prepare what you need for your complaint to be resolved in a timely way.
If your adviser hasn’t followed up on your complaint or you’re not satisfied with
their response, you can take your complaint to AFCA for investigation. If your issue is about the performance of an investment, this isn’t grounds for a complaint, unless misrepresentation or non-disclosure led to your decision to invest [3].
Can the AFCA determine financial compensation?
In the first instance, AFCA will seek to negotiate between you and the financial provider involved to come to a settlement arrangement. If this course of action doesn’t lead to a resolution, AFCA may recommend a number of outcomes to address any direct loss or harm caused by a financial provider. This can include a compensation amount up to the value of $500,000.
Find out more about possible outcomes from an AFCA complaint.
How do I make a complaint to AFCA?
Consumers and small businesses can make a complaint online at www.afca.org.au, at [email protected] or by Freephone 1800 931 678.
Looking for tips on finding the right financial advice for your needs and circumstances? Our checklist of what to look for from a financial planner is a good place to start.
[1] AFCA, Media Release, Australian Financial Complaints Authority (AFCA) opens for business, 1 November 2018, https://www.afca.org.au/news/media-releases/australian-financial-complaints-authority-afca-opens-for-business/
[2] FSC, Media Release, 1 December 2016, Overwhelming majority of clients have high trust and satisfaction with their financial planner : University study https://www.fsc.org.au/_entity/annotation/edf3cefd-d9f0-e611-80d3-00155dea4d00
[3] AFCA, Investments and financial advice complaints, “There are some things you can’t complain about to us, including if your complaint only concerns the investment performance of a financial investment. There are some exceptions, however, to this – for example, if the complaint concerns non-disclosure or misrepresentation.”
https://www.afca.org.au/make-a-complaint/investments-and-financial-advice/
