Complaints about financial advisers have continued on a downward trend in the new financial year, according to the Australian Financial Complaints Authority (AFCA).
Speaking at the AFCA member forum, Natalie Cameron, lead ombudsman for investments and advice, said advice complaints were low during the 2020/21 financial year and had been continuing to decline.
Some 1.8% of all AFCA complaints related to advice or were made about a financial firm which identified as an advice provider. This was a total of 1,238 complaints.
The advice complaints which were received related to failure to abide by regulatory principles or industry best practice, as well as a handful of complaints where felt they did not receive advice at all.
“I am pleased to say since 1 June, 2021, we have seen a continuing reducing trend of complaints against advisers,” Cameron said.
“At this early stage, it is looking like a 33% reduction in the first couple of months of the new financial year.
“So well done to everyone out there who is trying to get it right and trying to provide great advice to their clients.”
Over half of advice complaints were resolved in favour of the financial firm, Cameron said.
Looking at the investment and advice sector specifically, AFCA received 3,888 complaints and the majority of these related to shares. The top five issues were service quality, inappropriate advice, failure to act in clients’ best interests, incorrect fees or costs and failure to follow through on agreements.
Around a third were resolved at the registration and referral stage and Cameron said this was an area that could be improved.
“About a third of the 3,888 complaints received are being resolved in registration and referral.
“I think there’s still probably opportunity for investments and advice to be resolved more frequently at that stage but it’s still a decent proportion being resolved.”