How to put AFCA ‘out of business’

The Australian Financial Complaints Authority (AFCA) has produced a presentation for advisers on key steps with how to avoid the ire of the complaints authority.

The document, which was shared by an adviser to Money Management included the subsection “How to put AFCA out of business” which highlighted the steps advisers should take to give them the best chance to defend themselves against the complaints authority.

It noted that taking detailed file notes, establishing the terms of engagement, and turning away clients when appropriate were the top three key points.

Related News:

“What does the client want? How much will they pay and for what? Explain what types of services you are providing – general, personal advice and scaled advice (reasonable attempts to obtain information),” the document said.

It said advisers should be turning away clients if the adviser does not offer the appropriate advice, have the requisite expertise or there were communication problems.

Establishing what the client wanted and tailoring advice to that was important. An example was retiring at 65 with an income of $50,000 a year, not just creating wealth or capital security.

It noted it was important to explain the risks to clients, particularly those who want to act against the advice.

Making the statement of advice (SoA) understandable, which included checking for errors, irrelevant references was important. AFCA would also check for a lack of care and diligence or if a cookie cutter SoA was used.

When it came to superannuation switching and self-managed super funds (SMSFs) it would check whether there was a good reason to recommend a switch and whether there was “compelling” reasons to recommend an SMSF.

Finally, it said advisers should not be recommending products to their clients if they client did not understand it.

Advisers had done well with the complaints authority and made up only 1% of total complaints, which had continued its downward trend this financial year.




Recommended for you

Author

Comments

Comments

Another way to put AFCA out of (financial adviser regulation) business is to establish a genuine single disciplinary body. Instead of advisers grappling with multiple different regulatory regimes, all of which add to cost and complexity of advice for consumers, why not remove AFCA, ASIC, Austrac and licensees from adviser regulation, and have a single disciplinary body?

Jane Hume, you despicable liar, creating a new disciplinary body and calling it a "Single Disciplinary Body" does not make it a single disciplinary body at all, when you continue to burden advisers with multiple other disciplinary bodies.

Add new comment