Just 1 in 5 advice complaints resolved early
While the proportion of complaints to AFCA about advice licensees has remained low, the ombudsman has warned the industry is lagging on the time taken to resolve complaints.
Presenting at the SMSF Association National Conference 2021, AFCA lead ombudsman for investments and advice Natalie Cameron said, as of August 2020, just 20 per cent of advice complaints were resolved at the earliest “registration and referral” phase of the AFCA complaints process.
“It’s interesting that we have a low number by comparison of advice complaints that resolve early,” Ms Cameron said.
“For the investment and advice space, only 20 per cent of complaints were able to be resolved as soon as they come in the door — that compares to 51 per cent of banking and finance complaints.”
The advice sector was one of the worst performers in terms of early complaint resolution, with 45 per cent of general insurance complaints and 30 per cent of life insurance complaints resolved at the earliest stage.
However, Ms Cameron said the number of complaints received in the investments and advice category was generally low, with just over 2,700 complaints received in the 12 months to August 2020, representing 2 per cent of AFCA’s 80,000 total complaints in the period.
In terms of complaint types, 771 related to misleading product or service information, while 581 were around inappropriate advice. A further 497 related to failure to act in the client’s best interests and 426 were around failure to follow instructions.
Roughly a third of investments and advice complaints received over the 12 months were not able to be resolved as they were outside of AFCA’s rules, while 26 per cent were eventually resolved by the financial firm. A further 14 per cent proceeded to negotiation and 10 per cent were discontinued.
Ms Cameron said 19 per cent of AFCA members in the advice sector had complaints lodged against them during the 12-month period.
Tony Zhang
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.
