The number of members expelled from the Australian Financial Complaints Authority (AFCA) almost doubled between 2023 and 2024, according to internal data.
AFCA data released in December 2024 found 859 members were expelled during the year, 210 of whom were Australian Financial Services (AFS) licensees. The remainder were Australian credit licensees.
This was up from 443 members in the previous year, a rise of 93 per cent.
The three main reasons that members were expelled were: failure to pay monies owed, the member ceasing to be authorised or licensed and the member being insolvent.
Members of AFCA are required to pay an annual membership levy, along with fees for any complaints received about them.
Some 13 AFSLs were expelled for being insolvent, 10 for being unlicensed and the remainder had failed to pay their fees.
AFCA said it typically attempted to recover any monies owed from members, and if the member was required by law to remain an AFCA member, then the firm was encouraged to discuss payment options with the membership team.
The most high-profile expulsion from AFCA during the year was Dixon Advisory but AFCA came under criticism for failing to expel the firm earlier.
In its submission to the Senate economics references committee into wealth management companies, the Financial Advice Association Australia (FAAA) argued questions needed to be asked as to why Dixon Advisory was allowed to remain a member for so long.
The firm remained an AFCA member for two years after its collapse until being expelled in June 2024, which allowed complaints from consumers to reach over 2,700.
It suggested the committee explore “the manner in which the Dixon Advisory membership of AFCA was extended excessively leading to a substantial jump in cases that will be paid for by industry”.
“The cancellation of the licence should not be unreasonably extended. The two years and five months that was allowed for Dixon Advisory clients to complain was excessive,” the FAAA said.
“There needs to be a standard approach and clients need to understand that there is a limited window. We suggest specific questions should be asked of ASIC and AFCA to understand the timeline and the reasons for the decisions made in relation to Dixon Advisory’s AFCA membership.”
In addition, AFCA recently appointed lawyer Jonathon Hunyor to its independent board, as a director with consumer experience. The appointment became effective on 1 January 2025.
Hunyor is a practising lawyer with over 25 years of experience across discrimination, human rights, Aboriginal land rights, administrative, criminal and coronial law. He serves on the boards of the Australian Pro Bono Centre and Community Legal Centres NSW.
He is also the chief executive of the Justice and Equity Centre, an independent law and policy centre focused on serving those facing disadvantage and protecting human and civil rights.
Hunyor will replace Gerard Brody, the former chief executive of the Consumer Action Law Centre, who became a member of the AFCA Board in 2023.
“With his legal expertise and proven leadership in advancing consumer rights, Jonathon will bring a unique and valuable perspective to our mission,” said AFCA’s board chair, Professor John Pollaers.
“Jonathon’s commitment to equity and justice aligns perfectly to our goals, and we are confident that his contribution will help drive meaningful outcomes for the community.”
So people who had given up on financial planner were “expelled”. Probably better than writing that they had a complete mental breakdown and were diagnosed with severe depression.