AFCA forced to change its approach to ARs

21 January 2021

The Australian Financial Complaints Authority (AFCA) has been forced by the Australian Securities and Investments Commission (ASIC) to change the way it treats authorised representatives.

AFCA announced to it had amended its rules to provide clarity for consumers and financial firms regarding AFCA’s jurisdiction to receive complaints about the conduct of an authorised representative of an AFCA member, noting that this was a result of a legislative instrument issued by ASIC on 5 January, 2021, requiring AFCA to update its rules.  

It said the rules change followed the judgment of the NSW Supreme Court in DH Flinders Pty Limited v Australian Financial Complaints Authority in November 2020 relating to AFCA’s jurisdiction to consider a complaint against a licensee in relation to the conduct of its corporate authorised representative, specifically where the conduct of the representative was without or outside authority. 

Related News:

The AFCA announcement said the judgement had highlighted that AFCA’s Rules needed to be clearer to ensure that they reflected the same obligations and liabilities for licensees as set out in the Corporations Act.

“At ASIC’s direction, the rules now clearly reflect the same statutory liability for licensees regarding their authorised representatives as set out in the Corporations Act and the National Consumer Credit Protection Act,” it said. “The updated AFCA rules apply to complaints received by AFCA from 13 January, 2021, onwards. “

It said complaints received before 13 January, 2021, will be handled by AFCA under the previous Rules.

“As the vast majority of complaints AFCA considers are between parties with a direct relationship (e.g. a bank to a bank customer) these complaints are not impacted by the rules change,” it said.

“AFCA is currently reviewing a very small number of complaints received before 13 January 2021 which are potentially impacted by the judgment and is in contact with those complainants and financial firms to discuss the specifics of their complaint.”

“For the small number of complaints which may be outside AFCA’s rules, AFCA will be encouraging the financial firms involved to consent to AFCA considering the complaint to achieve an early resolution and avoid the prospect of potential court or other action by the complainant.”




Recommended for you

Author

Comments

Comments

Finally some sanity coming into Advice BS REGS.
AFCA the Kangaroo Court for once getting it's wings clipped just a little.
And ASIC may one day look at reducing BS Advice REGS.
But caution - PIGS usually fly backwards over Canberra Bubbles and nothing to help Advisers usually eventuates.
Of course unless you are a call centre jockey from Industry Super and then you will be allowed to give all manner of Advice, with zero qualifications, zero AFSL compliance, no FARSEA, no BID and all paid for via hidden Industry Fund hidden commissions : - /

I put 2 claims to AFCA over the decision of the Trustee of REST to give 50% (or $213,000) of my deceased son's superannuation and death benefit to a girl he had known for 2 yrs or less and contrary to his non binding nomination and his Will. The first complaint was rejected on the basis that I said I wanted thst money and it was past the time to object which I understand. The second complaint advanced much further without including he money. So after about 1 month I was told by AFCA that as the nominated beneficisry of my deceased son's superannuation and death benefit I wasn't eligible to cpmplainand that only the person who applied for Probate could apply. My question is why Probate when Super is not covered by a Will???? And only the Solicitor or Executor can complain??? Why didn't either of the people who looked at my case not tell me in the first conversation that I was ineligible as a beneficiary??

I agree with you on the Super not a part of the estate point.

I think the Trustee would be the person who applied for probate... a lawyer only helps with this action. However in a lot of cases where there are low assets outside of Super (I think less than $50,000) it is not necessary to even apply for probate. Who was the executor, and was probate even necessary?

Add new comment