FAAA backs tougher AFCA stance on paid representatives in complaint process

The Financial Advice Association Australia (FAAA) said it is in favour of paid representatives having to adhere to stricter rules in how they engage with the Australian Financial Complaints Authority (AFCA).

“The cost of AFCA’s complaints handling services are already very high. We do not accept that they should be pushed higher by paid representatives refusing to follow approved processes and procedures. This is unfair to financial firms, who are paying for AFCA’s costs,” the FAAA said in its joint submission to AFCA’s 2025 proposed rules update.

While AFCA is a free service for consumers, it does allow paid representatives to represent a a consumer in a complaint.

“To ensure that AFCA can deal with complaints lodged by Paid Representatives efficiently, AFCA considers that Paid Representatives should use the most efficient communication channel required by AFCA when they are submitting a complaint and corresponding with AFCA about a complaint,” AFCA said in the rules update proposal.

The current rules allow submissions to AFCA through its online form, in writing, or by telephone. Under the proposed change, the complaints authority would require a paid representative to use “the most efficient communication channel required by AFCA when they are submitting a complaint and corresponding with AFCA about a complaint”.

“AFCA receives thousands of complaints from Paid Representatives each year. If a Paid Representative fails or refuses to use AFCA’s preferred communication channel to either lodge a complaint or communicate with AFCA, this inevitably impacts AFCA’s ability to manage those complaints efficiently and consistently,” it said.

“This impact is magnified when the volume of complaints lodged by Paid Representatives each year is in the thousands. Noting that Paid Representatives are paid by consumers for the service they provide, it is reasonable to expect that they have adequate systems and processes to work with AFCA’s portal and other preferred communication channels.”

According to the FAAA, forcing paid representatives to use “approved AFCA processes” is a positive step in streamlining the system.

“We firmly support the ability for complainants to access AFCA without the need to incur fees being paid to third parties to assist in the submission of complaints, however we accept that in some cases a complainant may wish to seek the support of a third party,” it said.

“With respect to paid representatives, this does not come without impact, including the prospect, in some cases, of losing a very substantial proportion of any monetary benefit obtained as a result of achieving a determination.

“That is a decision for the complainant to make, however we do not accept that paid representatives should have the ability to circumvent AFCA processes and procedures or to cause excessive additional cost by failing to follow efficient and approved processes.”

While it is supportive of the aims, the FAAA added that it would be “beneficial” for the complaints authority to provide more specific information on the scale of the issue beyond just noting it receives thousands of complaints from paid representatives.

“It would be helpful to understand the scale of non-compliance with requirements and an estimate of the number of paid representatives who are operating without the necessary AFCA membership. We would be keen to understand the likely impact this is having on AFCA’s costs,” the submission added.