During a webinar as part of the FPA’s Virtual Congress on Monday, AFCA chief executive and chief ombudsman David Locke revealed that of more than 84,500 complaints received by the ombudsman in the 2019-20 financial year, 1,332 related to the advice industry.
This amounted to around $26 million in compensation paid out to consumers that related to advice complaints.
The ombudsman said only 16.7 per cent of the 1,571 AFCA members in the advice industry had had complaints lodged against them in the 2020 financial year.
The majority of these complaints were around the appropriateness of advice, if the adviser had acted in the client’s best interests, fees and costs, failing to provide advice and misleading product or service information.
Most complaints related to superannuation funds, mixed asset funds and SMSFs.
While the ombudsman had received a flood of consumer complaints related to COVID-19, only 16 of these related to advisers.
A spokesperson for AFCA said the ombudsman received “very few complaints” about advisers overall.
Must be hard evidence that FASEA, FOFA, Opt in, renewals and removal of life insurance commission is a success?
I would say no. The quality or processes in delivering advice has not improved. It’s merely several years of positive investment and superannuation returns. 25 years of experience and multiple FOS complaints on others behalf, tells me people are always wanting to blame someone else and complaints are positively correlated with negative markets.
Or is it due to less advisers providing less advice to clients due to all the compliance hurdles preventing this from happening in an efficient manner
Perhaps our Federal Members should be taking this up with Parliament and ASIC…and reminding Hayne that while he may have been a very esteemed and successful legal professional, when it comes to financial services he has no idea what he’s talking about.
Interesting that SMSFs were a high source of AFCA complaints. This only relates to SMSF advice given by advisers and licensed accountants. Unlicensed accountants, who provide the majority of SMSF advice, are not subject to AFCA. It’s scary to think what the true extent of bad SMSF advice really is.
Before these figures get misinterpreted, let’s be clear that 16.7% of AFCA members receiving a complaint does NOT equal 16.7% of advisers. It equates to about 1.5% of licensed advisers. Advisers aren’t AFCA members, only their licensees are. Some licensees have over a thousand advisers.
Well sure that sounds like a great reason to increase REGS, increase cost recovery, increase Ethics via FARSEA, etc because those dam Financial Advisers cause 2% on AFCA complaints but get 100% of the negative Govt, and Regulator Attention.
Our Govt and Regulators have completely lost the plot.
yet apparently Advisers are unethical and need to governed within and inch of their professional life???? Add that to the list of many things I just don’t get.
“Very few complaints about advisers” So based on this why is ASIC waging a war on financial advisers? If the complaints have more to do about fund managers, product providers, retail and union funds why aren’t they looking at them? Is it because they can easily ruin the livelihood of a single financial planner and justify their existence. As seen when they take on the big boys, the source of the majority of complaints, they lose and lose badly. ASIC is lazy and incompetent, and failing clients.
Because this suits the agenda of the Union based super funds, who want to continue scamming their members with intrafund advice fees, without obtaining opt ins or obtaining informed consent for those ongoing fees.
Because we’re fractured and easy to make examples of.
With the amount of advisers leaving the industry (rightfully so) there is nobody left to complain about…..
Share market rose 30% so complaints are usually correlated.
It kinda didnt. FY20 not the last 3 months.
Yup. 2% of the complaints; 98% of the regulatory focus. Am I the only one not surprised by this? I doubt it.
Is that because there arent any left?
Why then is the bulk of the Regulatory response aimed at advice?